LONDON Oct 14 British fund manager Hermes
Investment Management is calling on FTSE 350 companies
to cap their chief executive's pay as part of efforts to restore
public trust in the way companies are run.
Hermes, which invests on behalf of the BT pension scheme and
other institutional investors, said it would detail its ideas in
the coming weeks, as the government gears up to launch its own
plan to overhaul corporate governance.
"The public has lost trust about the governance of executive
pay," said Hans-Christoph Hirt, Co Head of EOS, Hermes
Investment Management, adding now was the time for investors to
voice their expectations ahead of next year's voting season.
"We want to see simpler packages, lower variable pay, much
higher shareholding requirements and stronger accountability of
remuneration committees," he added.
Hermes' plan, first reported by Sky News, follows comments
from leading investor Legal & General in September, in
which the firm called for bonuses to be cut, as part of a number
of steps it wanted remuneration boards to consider.
The moves come after a series of investor rebellions earlier
this year amid anger at what they thought were excessive payouts
to top bosses, including at BP and Smith & Nephew.
Prime Minister Theresa May said last month that the
government will put forward proposals later this year aimed at
improving corporate behaviour, including tackling excessive pay.
May had earlier pledged to put workers on company boards and
make shareholder votes on pay binding.
(Reporting by Simon Jessop; Editing by Elaine Hardcastle)