Bumper City pay deals increase

CEO pay is the ceaseless corporate governance issue and, this week, the Financial Times gives it plenty more page time with a piece on “bumper” remuneration hikes for UK CEOs.

The reasons are clear. The city has been campaigning for more pay since 2023 and the Investment Association issued fresh guidance two years ago that was widely viewed as licence to write bigger cheques.

It has to be said that the current government has done its best to encourage more competitive remuneration too.

But before remcos go ahead with the fat pay rises, it’s worth bearing in mind the words of the Investment Association’s director of stewardship, Andrew Ninian.

“Heading into AGM season,” he tells the FT, “investors will continue to expect remuneration committees to demonstrate a strong link between pay and performance and for firms to provide company-specific rationale for their chosen approach to remuneration.”

In other words, you better have good reason.

Yves Rocher faces ‘loi de vigilance’

Over in France, the courts have delivered the first ruling in a case involving the “law of vigilance”, against cosmetics giant Yves Rocher Group.

For those of you not up on your French corporate law, the loi de vigilance is the law that says French companies must check their supply chains for human rights abuses.

Yves Rocher were found to have missed issues in a Turkish subsidiary, where employees were struggling to gain union recognition.

Legal campaigners Sherpa say in a statement: “It is a historic decision, achieved by the tireless efforts of the factory workers. It also sends an important message: the duty of vigilance can be a tool in the fight against corporate impunity.

“Multinational companies can no longer ignore working conditions in their factories abroad.”

Et ça, ça c’est la vérité!

Musk tweets fall foul of law

More court action over in the US after a Californian court ruled that two tweets from Elon Musk during his takeover of Twitter unlawfully depressed the company’s share price.

The lawsuit argued that Musk sent the tweets in “conduct seasoned to create doubt about the deal and drive Twitter’s stock down substantially in order to create leverage that Musk hope to use to either back out of the purchase or renegotiate the buyout price by as much as 25% which, if accomplished, would result in an $11 billion [£8bn] reduction in the buyout consideration.”

A blog by proxy advisers Minerva Analytics says: “The judgement highlights the risk created when senior executives communicate market-sensitive information through informal channels.” A lesson to us all.