Brussels, 07/04/2014 (Agence Europe) - The pay of executives working for companies listed on the stock exchange is being scrutinised by the European Commission. Commissioner Michel Barnier, responsible for the internal market, will present a package on corporate governance on Wednesday 9 April, which will affect shareholders' rights.
Shareholder rights, “say on pay”. This package is based on revising the directive on shareholder rights. The proposals would like the ratio between the pay of executives working for companies listed on the stock exchange and their employees to be discussed and approved by shareholders, who would be able to vote on this issue (the “say on pay” principle). According to one source close to the dossier, this is about bringing shareholders on board and giving them greater responsibility. Such measures are already in practice in Belgium. Revision in the directive would primarily aim to develop greater transparency and bring the respective interests of companies and shareholders closer together, particularly in the long term. This revision was in the European Commission's action plan on long-term funding presented at the end of March (see EUROPE 11048).
Single-member company. On Wednesday, Barnier will put forward a draft directive on single-member companies. This will harmonise the status of companies in the different national legislations, on the basis of clearly defined criteria, in an effort to promote the mobility of SMEs. Single member companies that want to open a branch in another country of the Union currently have to confront both legal and administrative difficulties. This results in only 2% of them becoming international.
On the same day, the Commission will present recommendations for reasons that justify exemptions to the corporate governance code, in an effort to make them more watertight. This will mainly involve companies listed on the stock exchange improving the information they give to investors. (MD)