LONDON (Reuters) - British fund manager Hermes Investment Management is calling on FTSE 350 .FTLC 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 (LGEN.L) 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.
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