CLAMP FAT CATS PAY.

A major UK shareholder Hermes Investment Management, set up in 1983 to manage BT pension scheme and manages funds worth around £34billion, calls for clamp on Fat Cat pay.

The Hermes Investment Management will issue a document with  ground-breaking proposal referring to the chairs of FTSE 350 firms.

It is thought that this is the first time a cap on all pay as well as individuals was called.

Dr Hans-Christoph Hirt, co-head of Hermes stewardship arm EOS said: "There are significant problems with executive remuneration in the UK, including the complexity of packages, a weak link between pay and corporate performance and in a number of cases executive quantum. The public has lost trust about the government of executive pay.

"Now is the time for investors to articulate their expectations and work together with companies to reform executives remuneration ahead of the voting season 2017.

"We want to see simpler packages lower variable pay, higher shareholding requirements and stronger accountability of remuneration committees."

The proposal includes firms to publish the figure their chief executive's pay would not exceed, which would  be discussed with investors.

Legal & General chief executive Nigel Wilson said: "The average pay ration between FTSE100 chief executives and employees had jumped from 47.1 in 1998 to 129.1 last year, but despite growing disparity there is little evidence ratcheting up executive pay leads to better company performance."

It is great that someone of that level admits and points out the unbelievable situation of which everyone is aware of but nobody speaks openly about it leave alone doing something about it.

Although PM May keeps talking about reform but will it come about. After all those £4 and £5billion plus  bonuses for chief executive has to be reflected in consumer prices. It would be a great relief if those sky-high, not-really-earned pay packages would be brought down to earth but will it?

The chief executives have not only drastically increased their remuneration but also multiplied at an incredible rate.

Furthermore, a number of chief executives are employed on several firms and committees which brings another pay packages. No one can effectively work on two or more top positions. It should also be looked into it and laws brought out against it.

HSBC BANK NEW PAY POLICY Updated 16 Dec., 2016

 

STUART GULLIVER
 CHIEF EXECUTIVE

  

BBC announced that HSBC lost 14 per cent profit in its first-quarter.

HSBC is now going to axe 6,000 staff.

After a great revolt by the shareholder at the announcement that the Chief Executive should receive a £14million pay, including bonus and dividends HSBC now bringing a new pay policy in. It is supposed to reduce the pay to Chief executives by seven per cent.

HSBC is Europe's biggest bank, The new pay policy also reduces the pension from 50 per cent to 30 per cent of their salary. Furthermore, the long-term incentives subject to a three year forward-looking performance period.
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The proposal was agreed by 96 per cent of the shareholders giving overwhelming support for chief executive Stuart Gulliver's £7,3million pay package for 2015 which was reduced from £7,61milllion.

Changes had to be made provoked by the anger of investors of Boardroom remuneration. It was also caused at BP and Anglo American. It is nothing but high time that huge sums of money to chief executives are being curbed and should even be more. A pay of £7,3million to any man can surely not be justifiable.

Salaries and bonuses to chief executives across the world and industries are blown out of all proportion.

Even a leading body from the City stated that the system for rewarding executives at UK-listed companies was "not fit for purpose."

HSBC chairman Douglas Flint said: "The board was acutely aware for the performance of its shares, which have fallen by more than one fifth since last year's annual meeting."

He told investors: "We had expected that the remuneration policy you approved back in 2014 would not need to be refreshed until it expired next year.

"However, regulatory changes as well as responding to shareholder feedback have caused us to make some revisions to this and so we are bringing it back for your consideration this year. The impact of the new policy is to lower the maximum opportunity for the executive directors by around 7 per cent."
Mr Gulliver said: "The global economic outlook was uncertain but HSBC remained committed to paying higher dividends subject to long-term profitability.

"By the end of 2017, we will have further simplified the organisation, addressed the biggest drags on our performance and refocused the business to capitalise on the opportunity we are privileged to have access to through our strong presence in Asia."