Investors unhappy over fund managers’ pay hike

Dhaka,  Sat,  27 May 2017
Published : 16 May 2017, 13:22:54
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Investors unhappy over fund managers’ pay hike

Investors unhappy over fund managers’ pay hike
UK group Schroders, which voted in favour of 91 per cent of pay policies at the UK groups it invests in, paid its chief executive £6.3 million last year, according to a global media report Tuesday.

That sparked a mini-rebellion from its shareholders. Stripping out approval votes of the Schroder family, 12 per cent of investors failed to support the policy at last month’s annual meeting.

Last month, Switzerland’s GAM - which awarded its chief a 28 per cent pay rise for 2016 despite the company’s disappointing performance - attracted a full-scale revolt. Less than 18 per cent of shareholders voted in favour of its pay report.

GAM does not disclose its own voting record, but a subset of its proxy data from Proxy Insight suggests it votes in favour of pay reports 98 per cent of the time.

It would be simplistic, however, to conclude that these investors are so riddled with conflicts of interest and so cosy with the companies they invest in that they are bound to just nod through any old management proposal.

Schroders is seen by the companies it buys into as a campaigning voice on governance issues, including pay. It might not vote against remuneration policies that often, but it can be influential behind closed doors. It also works with other big investors to bring about change pre-emptively.

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