NAPF makes ‘constructive’ about-turn
The National Association of Pension Funds (NAPF) has changed its position on binding votes for executive pay, in light of the ‘shareholder spring’.
Appearing before MPs to discuss the proposed enterprise and regulatory reform bill, David Patterson, NAPF corporate governance chief, called the plan “constructive”.
The impact of those negative votes, because they have never got to the 50% mark, will be seen in the course of the rest of this year
He was challenged by Hartlepool Labour MP Iain Wright, who asked: “My understanding is the NAPF was not in favour of binding votes on pay. Have you changed your position now?”
Patterson responded: “Yes, we have,” putting this down to “examples, in the course of just the past few weeks when it has been used and significant votes against individual directors have been lodged”.
He added: “The impact of those negative votes, because they have never got to the 50% mark, will be seen in the course of the rest of this year, as boards review the significance of those votes and work out how they ought to respond to their investors.
“[Institutional shareholder engagement] is going to become an increasingly important feature of the investing landscape as we go forward. So there is scope to do things better – and more of it.”
Related articles:
Step closer towards '75% rule' on pay votes
Binding shareholder votes will only block a fraction of pay deals
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