Pay rises

Nearly all UK and European plans for higher chief executive pay received the support of shareholders, according to proxy advisers Glass Lewis.

In fact, one UK company, the fintech firm Plus500, was the only business to see its pay plans voted down, with a 65.8% vote against.

There were, however, companies who say substantial opposition to their remuneration reports, enough, at least, to end up on the UK’s Public Register (a kind of remco sin bin for companies who experience hefty opposition to their pay proposals). Synthomer, a chemicals supplier, saw its pay report meet with dissent of 44.6%, while Clarkson, a shipping services firm, clocked an uncomfortable 42.5%.

The average UK CEO pay rise was 4.6%, according to Glass Lewis, up on 3.7% last year.

Elsewhere, despite countless efforts to undermine the term, ESG is becoming a fixture of pay awards. Glass Lewis says a “supermajority” of Europe and Northern America’s largest companies now include ESG in at least one incentive programme. In fact, 92% of European blue-chips included ESG in incentive programmes this year, compared to 89% last year.

ESG pay criteria is growing in popularity in the US too, where the term is much more contentious. Of the S&P 500, 71.4% use ESG “considerations”, a rise of ten percentage points on 12 months earlier. That’s inflation for you.

Ethical investors

Ian Peters has bid farewell after stepping down from his post as director of the Institute of Business Ethics (IBE) after four years, with Lauren Branston taking the helm.

In an article for the IBE’s website, Dr Peters says he leaves with “great confidence for the future”, because more and more companies are defining their “purpose and values and investing in developing an ethical culture in their organisations”.

This is all to the good. “But,” he warns, “not everyone agrees with this way of doing business, with some criticising companies for adopting a ‘woke’ approach and taking their eye off the ball of competitiveness.

“Despite evidence to show that ethical companies are better able to attract the best talent, secure investment and appeal to customers, there are still well-known detractors in business and politics who argue that companies are spending too much effort on purpose statements and policies promoting diversity, equity and inclusion.”

London calling

In the rush to go on holiday, many might have missed the Confederation of British Industry (CBI) announcement that it has started a new group to counter the decline of London as a stock market.

The group will help to identify policy changes on “structural, regulatory and governance reforms” that could make London a better place to list a company, trade stocks and improve relations between boardrooms and investors.

The CBI is not alone in doing this. The chief executive of the London Stock Exchange, Julia Hoggett, leads just such a group—the Capital Markets Industry Taskforce—which campaigned, successfully it has to be said, to kill off new reporting responsibilities under the previous Tory government.

Hoggett has also talked up the need for higher CEO pay, which seems to have worked.

New chancellor Rachel Reeves also backed reforms watering down the rules for dual class shares and, some might argue, shareholder rights. So, the City doesn’t seem short of supporters.

Nevertheless, the CBI group got an airing this week through an article in The Times by CBI chair Rupert Soames, in which he says the voice of companies has been “largely unheard” and the new campaign body will “seek to make the default relationship between boards and investors one of trust and pragmatism, centred on the interests of the company, rather than mistrust and the unthinking adherence to rules.” He adds the body will aim to explain “when complying is not the right thing to do.” Which seems brave thing to say.