Ireland 'Say-on-Pay' gathers momentum

1 June 2009

Sarah Wilson

Manifest's campaign to ensure shareholders at Irish companies have the opportunity to cast an advisory vote on the remuneration report gathered momentum over the weekend, with a full page article in the Irish edition of The Sunday Times. Last month Manifest filed shareholder resolutions at five Irish companies seeking an advisory say-on-pay vote.

The Sunday Times piece noted support for Manifest's efforts from both investor groups and regulators.

The Irish Association of Investment Managers and the Irish Stock Exchange are now consulting with Ireland's Department of Enterprise, Trade & Employment on the EU recommendations on directors' remuneration, which call for a shareholder vote.
Frank O'Dwyer, chief executive of the Irish Association of Investment Managers stated: "We have publicly stated we will be expecting companies to introduce a say on pay. The UK has a non-binding vote of shareholders and we favour that".
The Irish Stock Exchange is reviewing whether to introduce a say on pay through a change to the Companies Act or its listing rules. A spokesperson was quoted as saying: "We are looking at how that should happen rather than if it should happen".
A spokeman at RiskMetrics also supported the introduction of a say-on-pay vote.

The Sunday Times quoted Manifest chief executive, Sarah Wilson, who said: "We thought this was a window of opportunity for Irish companies to adopt best practice before the EU forces them. DCC is a good example of a company that had its problems and recognised that to win back shareholder support it should be as open and transpsarent as possible".

Manifest continues to work behind the scenes with the remaining companies on ensuring that shareholders have a say-on-pay. At Bank of Ireland, due to its incorporation by Charter (rather that under the Companies Acts) and its By-laws, it may take an amendment to those By-laws before a say-on-pay resolution is possible, but the Bank is keen to give shareholders such a resolution at the earliest opportunity. Manifest encourages the other Irish companies with AGMs to follow the lead of DCC plc and include an advisory say-on-pay vote on the agenda.

Separately, in the Sunday Tribune, Manifest Research Manager Alan Brett, expressed surprise at the recent vesting of awards under the Performance Share Plan to four executive directors at Allied Irish Banks. He also commented on the increasing popularity of clawbacks in remuneration policies. "In the banking sector we are increasingly seeing companies insisting on claw-backs for bonuses," said Brett. "Companies that did not have them are bringing them in. Bonuses that would typically, until the end of last year, be paid out each year will now be held back for anything up to three years."