On Tuesday 14 March, the European Parliament approved the inter-institutional agreement reached in December of last year on the directive on the rights of shareholders of listed companies and major groups established in the European Union (see EUROPE 11685).
As the rapporteur, Sergio Cofferati (S&D, Italy) stressed, it has taken two and a half years of negotiations to reach this point (see EUROPE 11254). Many companies are managed by executives whose aim is an economic return in the extremely short term. “This is an extremely short-sighted policy”, and with this text, “the aim was to reverse this trend”, he told a press conference.
The legislative text, which was approved by a large majority (464 votes in favour, 39 against and 13 abstentions), aims to prevent speculation by favouring the long-term commitment of shareholders to companies listed on the stock exchange.
Listed companies will have the right to identify their shareholders. The member states may, however, provide for only shareholders holding a certain percentage of shares or voting rights to be identified, if this threshold does not exceed 0.5%.
Right of scrutiny over salary policy
The compromise also confirms the Commission's initial idea that shareholders will vote on salary policy ('say on pay' principle). The earnings of directors will be published (and kept public for 10 years), along with changes in directors' earnings compared to that of employees and company performances.
Increased transparency requirements will also be brought in for institutional investors (pension funds, insurance companies, etc.) regarding their investment strategies.
“The measures agreed upon will help steer investments towards a more long-term approach and will ensure more transparency for listed companies and investors”, said Cofferatti.
ALDE has tweeted that the text would lead to less red tape and more good corporate governance.
The shadow rapporteur of the Greens/EFA group, Pascal Durand of France, stressed that the Parliament's negotiating position originally contained amendments aiming to bring in public country-by-country reporting. Parliament has agreed to return to these provisions at a later date, as the European Commission presented a separate proposal in April of last year (see EUROPE 11530).
The Council of the EU has still to give its definitive approval to the agreement concluded with the European Parliament. (Original version in French by Élodie Lamer)