The negative views of shareholders are likely to have only a limited impact on how senior executives are remunerated within publicly-listed companies, according to a survey conducted by Chartered Secretaries Australia.
The survey of governance professionals found that most respondents would need to receive a negative response from more than 20 per cent of shareholders before they would be inclined to review remuneration practices.
It said that 12 per cent of the respondent companies said they would require a ‘no’ vote of between 15 and 20 per cent before triggering a review, while 20 per cent of the respondent companies said they would require a ‘no’ vote of between 20 to 25 per cent, while 28 per cent said they would need a ‘no’ vote of between 35 and 50 per cent.
Commenting on the outcome of the survey, the chief executive of Chartered Secretaries Australia, Tim Sheehy said that on the face of it, this could be an alarming statistic if the level of response was genuinely representative of the shareholder base.
“But where shareholder opposition is high, I expect companies would look behind the ‘no’ vote to analyse its composition and the reasons for such a negative reaction,” he said.
