Shareholder
The global economic crisis has sparked a debate over corporate governance and the regulatory environment in general with shareholders demanding more say in the running of the companies. In the United States, the government has introduced legislation that gives shareholders the right to vote (“say on pay”) on executive compensation for public companies receiving money from the Troubled Asset Relief Program (TARP). Bills have also been introduced in the US Congress that would make “say on pay” votes mandatory for all public US companies. The economic downturn is also encouraging shareholders around the world to become more vociferous. In the United Kingdom, for example, major public companies such as Next and DSG International have faced shareholder rebellions over executive pay. Meanwhile, there is a continuing debate in many countries about how best to encourage shareholders to take a long-term view rather than a “buy and sell” approach. Thus in the United Kingdom, Lord Myners, a government minister, has proposed that long-term shareholders should be rewarded with extra votes, arguing that institutional shareholders are too eager to sell their stakes in underperforming companies, instead of engaging with management to improve performance.
Checklists- Calculating Total Shareholder Return
- An Overview of Stockholders’ Agreements
- Raising Capital by Issuing Shares
- Stock Markets: Their Structure and Function
- Trading in Equities on Stock Exchanges
- Using Shareholder Value Analysis
Quotes
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