Not a single company among the more than 700 FTSE 100 “binding” say on pay votes have failed to receive majority support over the last five years, according to new research from the UK’s High Pay Centre, an independent non-party think tank which monitors executive compensation, inequality, governance and business performance of UK companies. In 2013, the UK implemented a requirement for all listed firms to give shareholders a binding say on pay vote once every three years and an advisory vote annually. The idea was that the combination advisory and binding vote would hold companies accountable. However, according to the High Pay Centre, pay has continued to increase – including pay ratios – while only 11% of the 700-plus shareholder votes have had shareholder pushback exceeding 20% while no company has failed.
Progressive groups like the High Pay Centre have shifted tactics over the recent years. Instead of focusing on the companies, the focus has become on the investors which own shares of the company. According to the High Pay Centre, the unanimous approval of FTSE 100 binding say on pay votes reflects the “conflicts of interest or sub-conscious biases” of major institutional shareholders which repeatedly support management. The tactic has been copied in the U.S. by groups like the Economic Policy Institute and As You Sow are increasingly focusing on the voting patterns of major investment institutions to push them towards more outright opposition of management.