IoD Submission - Department of Business Enterprise and Innovation -Transposition of Directive (EU) 2017 828
In December 2017, the Department of Business Enterprise and Innovation published a consultation on the transposition of Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement.
On 7th February the IoD submitted a response. In our consultation response we focus our comments on the area of shareholders’ rights, particularly in relation to director remuneration, as detailed in Articles 9A and 9B, which state that the remuneration policy of listed companies must be determined in an appropriate manner and that shareholders must have the opportunity to express their views regarding the remuneration of the company's directors.
Crucially, in our submission, we do not agree with the proposal that Member States shall ensure that the vote by the shareholders at the general meeting on the remuneration policy is binding so that companies are obliged to award their directors remuneration in accordance with approved policy. We believe that this a blunt instrument and could be misused by dissident shareholders.