London, 24 January 2012: Fidelity Worldwide Investment welcomes the remarks made in Parliament today by the Secretary of State for Business Innovation and Skills, Vince Cable, in which he outlined the government’s plans for greater disclosure on companies’ remuneration policies and for a binding vote on boardroom pay.
Commenting on Vince Cable’s statement, Dominic Rossi, Global Chief Investment Officer, Equities, Fidelity Worldwide Investment, said: “We support the call for greater transparency and the further disclosure required on the workings of Remuneration Committees. The introduction of a binding vote on pay is a particularly welcome move. As always, the devil will be in the detail, but we look forward to putting forward our proposals during the forthcoming consultation. Our goal remains to ensure that shareholders are given a greater opportunity to have a real say on directors’ variable pay.”
Rossi continued, “In our three-point plan of action on remuneration published last week, we also stated that directors’ variable pay should be subject to 75% approval by shareholders. We believe that this threshold is warranted to ensure that companies consult widely with shareholders prior to a vote. 75% approval gives companies a clear mandate and the need for a clear majority also encourages all shareholders to express their views as every vote, either for or against, will be important. We urge the government to take this into account during the consultation process which will follow today’s announcement.”
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Notes to Editors
Fidelity last week proposed a simple and deliverable three-point plan of action which requires variable pay to be subject to a Special Resolution each year. Fidelity believes this will go a long way towards increasing the accountability of directors in this important area:
Boards should be required to seek shareholder approval for annual variable compensation for directors before payment.*
If the resolution fails to win the support of 75% or more of the votes cast, the resolution is deemed to have failed and the Board would be required to seek a new resolution before payment can be made.
If the Board fails at the second attempt to secure 75% of votes cast, the Chairman of Remuneration Committee should be required to step down from the Committee.
* All existing commitments should continue to be honoured.
For further information, please contact:
Fidelity Worldwide Investment
020 7961 4409
07850 549 839
Fidelity Worldwide Investment
020 7074 5262
07852 330 870
Press Office Address: Fidelity Worldwide Investment, 25 Cannon Street, London, EC4M 5TA
Fidelity Worldwide Investment is a global leader in asset management, providing investment products and services to individuals and institutions in the UK, continental Europe, the Middle East and Asia Pacific. Established in 1969, the company has over 5,000 staff in 24 countries and manages or administers client assets of £165.5bn. It has over 7 million customer holdings and manages more than 740 equity, fixed income, property and asset allocation funds.
FIL Limited and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. Issued by Financial Administration Services Limited, authorised and regulated in the UK by the Financial Services Authority. Fidelity, Fidelity Worldwide Investment, FundsNetwork™, the Fidelity Worldwide Investment and FundsNetwork® logo and the F symbol are trademarks of FIL Limited.
With an award-winning range of investment funds and segregated mandates, Fidelity Worldwide Investment (FIL) is the investment company of choice for an ever-expanding array of financial professionals and corporate clients.
Fidelity Worldwide (FIL) also provides a wide variety of investment products and services for private clients. These investments include ISAs, Junior ISAs, Workplace ISA, Share Dealing, Investment Trusts and a range of pensions, such as a Self Invested Personal Pensions (SIPPS). The company also offers a Multi-Asset Portfolio as part of their Wealth Management Service.