The 2017 proxy season will be another "Shareholder Spring" and feature increased pressure and attention to company pay practices by the major institutional investors, according to the Financial Times. The Financial Times' conclusion is based on conversations with some of the world's largest asset managers, including Blackrock, State Street, and Fidelity international, which stated that the "shareholder rebellions" over pay which began in 2016 will continue into 2017. “Boards, aided by remuneration consultants, have managed to get away with giving excessive amounts of pay. There is a sense [among the public] that big businesses are fat cats who are in it for themselves,” says Richard Buxton, Chief Executive of Old Mutual Global Investors. “[Executive pay] has got out of hand,” the Financial Times reported.
Not surprisingly, the trend is again beginning in the UK where major investors are targeting companies and voting against directors where pay packages are deemed unacceptable in back-to-back years. However, the Financial Times notes that investors are turning their attention to US pay practices out of concern that US CEO pay far outstrips pay in other developed markets. The article goes on to cite CalPERs stance and its intention, as the largest pension fund in the US, to focus on pay quantum - a sentiment which was echoed in the article by Rakhi Kumar, State Street Global Advisors' head of corporate governance, who noted that "times are different." Last June, State Street, the world's third largest asset manager released "Guidelines for Mitigating Reputational Risk in C-Suite Pay", which outlines its approach to evaluating executive pay quantum and Directors' evaluation of pay.