2017 is going to be the year of the shareholders challenging directors pay.
We have already seen open challenges to severance payments where executives have been paid off in full. We are seeing detailed reviews of remuneration committee reports as to their rationale for contractual and performance related compensation and several companies have already had to back away from proposals
Remco (remuneration committee) chair people need to become smarter. Don't wait until the challenge comes - justify and prepare arguments well in advance and have discussions with institutional shareholders and industry bodies outside of the AGM. It is important their concerns are listened to, even by stating how the committees have taken account representations in the body of the remuneration report.
All companies should be putting forward their Remco chairperson as being available to key institutional investors at least once a year.
Regulation is on the cards and lobby groups and unions are making strong representations to government. Votes on individual director appointments and their remuneration packages are not far off.
Investor group takes aim at Thomas Cook chief executive's bonus