Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (174813)	6/24/2002 4:07:05 AM
From: maceng2	Respond to of 436258

Investors hatch plan to fight corporate greed By Simon Targett and Tony Tassell in London Published: June 23 2002 21:59 \| Last Updated: June 23 2002 21:59 Leading institutional investors are drawing up radical new rules to tackle corporate greed and excessive pay for executives. The plan, by a group of powerful pension funds from around the world, will put pressure on companies to limit the payment of stock options and cash bonuses to top executives. The International Corporate Governance Network, whose members control $10,000bn of assets, wants to lay down corporate governance standards on pay that can be applied across countries. The move is the latest sign of shareholder activism over pay in the wake of scandals such as the collapse of Enron. The ICGN, which is expected to approve the standards at its summit in Milan next month, is backed by some of the world's most influential investors. These include institutional investors such as Calpers, Capital Group, Fidelity, Hermes Pensions Management, TIAA-CREF, and Barclays Global Investors. It also includes representative bodies such as the Association of British Insurers and the Council of Institutional Investors in the US. Alastair Ross Goobey, the chairman of an ICGN committee which drew up the standards and a former chief executive of Hermes, said there was a post-Enron consensus was emerging among investors and companies about tackling directors' pay. "The only good thing to come out of the Enron affair is that people are realising there is something broken in the system," he said in an interview with FTfm, the FT's weekly fund management supplement. Under the new standards, ICGN members would use their voting clout to ensure that: The true cost of stock options and other benefits are charged to the revenue account. Bonuses for completing deals or rewards based on an organisation's size are banned. Share options are awarded in small regular batches rather than one large lump. The ICGN says any repricing of share options should also be put to shareholder vote. Companies publish estimates of the potential high and low outcomes of executive pay packages. Companies do not lend to directors and remuneration committees have the ultimate say on the appointment of remuneration consultants. Shareholder activism on such issues was highlighted last week when Vodafone, the telecommunications giant, announced it had modified its pay policy after extensive consultations with investors. It still faced criticism though from some shareholders over the payment to Sir Christopher Gent, its chief executive, of a £1.5m special bonus, even though the company's share price has fallen dramatically in recent months. The ICGN said transaction bonuses - such as the one given to Sir Christopher after the completion of Vodafone's acquisition of Mannesmann - offered "perverse incentives" to executives. "It may seem much more rewarding and enjoyable to participate in a very public bid for another company rather than to manage what is already owned," it said. news.ft.com