Not worth the Wates
The Institute of Directors (IoD) has revealed disappointment with adoption of the Wates Principles of corporate governance for private companies.
Roger Barker, director of policy and corporate governance at the IoD, said: “Although this is only the first year that large private companies have been subject to these new governance requirements, it’s nonetheless disappointing that one third of the companies examined in the study did not publish a corporate governance report at all.”
Meanwhile, earlier this week the UK’s governance regulator, the Financial Reporting Council, lauded the start. Sir Jon Thompson, the FRC’s chief executive, said: “We are pleased to see many private companies using the Wates Principles to communicate to their stakeholders relevant information about how they are governed, with an appropriate level of detail, using clear and understandable language. This is a positive first result. We hope that companies will build on this good start and continue to improve in practice and reporting in the future.”
Stocks and the single CEO
Does marriage affect a chief executive’s potential for insider trading? One group of academics thinks it does. Researchers from New Zealand looked at data from the US on insider transactions from 1996 to 2008 and found “married CEOs earn lower future abnormal profits compared to single CEOs, in support of our main argument that married managers are less likely to trade informatively for private gain.” Married CEOs are also less likely to attempt “opportunistic” trades.
The researchers say “marriage can limit the CEO’s insider trading profits… we consistently find that single CEOs earn significantly higher abnormal trading returns than their married counterparts.”
Allianz on ESG and executive pay
Allianz, one of Europe’s largest investors, has “insisted” the EU’s largest companies apply ESG measures to executive pay.
Matt Christensen, head of sustainable investing at Allianz Global Investors, said: “As an active investor, exercising our voting rights is one of the most powerful tools we have to effect change. In keeping with our desire to shape a more sustainable future with measurable positive outcomes, we want to ensure that our investee companies align their executive remuneration policies with ESG KPIs and we will vote against those that don’t.”
Cevian Capital, an investment house, backs the Allianz position on ESG and executive pay. Managing partner Christer Gardell, says: “To get away from ESG box checking and ensure that ESG considerations are truly embedded in corporate strategies, we need to incentives management teams to embrace them.”
Coates cuts pay… to £250m
Lastly, some further executive pay news. Denise Coates, chief executive of gambling website Bet365, has cut her pay for the first time in three years. Her pay falls by around one third for the year to March 2021 to £250m. The previous year she earned £421m.
The FT calculates Coates’ pay remains 16 times that of the FTSE 100’s highest paid CEO, Pascal Soriot at AstraZeneca.