Brussels, 19/05/2014 (Agence Europe) - The Better Finance network is recommending that business ownership should be able to be consulted for free online and in real-time. The European Federation of Financial Services Users believes that this kind of digital register would be the best way of identifying shareholders and encouraging their involvement in business management by getting them to vote more easily, particularly when a cross-border context is involved.
Online shareholder registers. Revision of the directive on shareholder law, proposed by the European Commission this spring, warrants a number of adjustments, according to the European Federation of Financial Services Users in its response published last April. This network is particularly critical with regard to shareholder identification, which would be done online and in real-time, for free. This organisation underlines the anonymity of small shareholders (those with less than 0.5 share).
The federation also regrets that the Commission suggests that intermediaries be allowed to provide shareholder identification services. Better Finance points out that “the revised directive should not provide commercial opportunities for financial intermediaries” because nothing has been specified about the fees that could apply to these intermediaries and which with the current wording must be “non-discriminatory and proportional”.
Voting must be free without cross-border impediments. Such an online register of shareholders should also contain free online system facilitating voting by shareholders throughout the Union, according to a suggestion by the federation. If intermediaries apply fees to shareholders, they should be proportionate to real costs and should not discriminate on the grounds of national or foreign shareholders in the EU, adds the federation. Better Finance considers it extremely important that shareholders can vote in a cross-border context and regrets the fact that many barriers prevent shareholders from exercising their right to vote. The federation also recommends getting rid of restrictions, particularly with regard to the appointment of proxies.
Better Finance welcomes the fact that the Commission is proposing that shareholders are invited to vote on deals by third parties when 5% of a company's assets are involved. Nonetheless, the organisation regrets that exemptions to independent reporting have been allowed.
“Say on pay”. The Better Finance network also supports the introduction into the directive on shareholders' rights of the “say on pay” principle, which will mean shareholders having the right to approve corporate pay policy. Executive pay is a key question for financial services users who need clear and easily understood information about the subject, particularly with regard to maximum salaries and more generalised ceilings on salaries. Better Finance states that “failure should not be rewarded” and explains that it supports a reasonable ratio between executive pay and salaries for other employees. (MD)