Is this something for ordinary investors to cheer?

[Bwana]

<deleted>

[northernladuk]

I often wonder if the poor stockmarket returns over the last 10 to 15 years are partly due to company bosses taking such a huge share of the profits in their various forms of remuneration (salary, bonus, pension, share options), leaving less money to pay out to ordinary shareholders as dividends. I remember reading a while back about some bank where the employees bonus pool was as big as (or maybe even bigger than) the shareholders dividend pool. FFS, who owns the 'effing company?!

I hope you don't buy stocks based on that reasoning and research!

[AtW]

I remember reading a while back about some bank where the employees bonus pool was as big as (or maybe even bigger than) the shareholders dividend pool. FFS, who owns the 'effing company?!

WHS

Don't think the changes they make would make big difference however since funds - big shareholders - don't like to vote against what the board suggests.

[Doggy Styles]

I often wonder if the poor stockmarket returns over the last 10 to 15 years are partly due to company bosses taking such a huge share of the profits in their various forms of remuneration (salary, bonus, pension, share options), leaving less money to pay out to ordinary shareholders as dividends. I remember reading a while back about some bank where the employees bonus pool was as big as (or maybe even bigger than) the shareholders dividend pool. FFS, who owns the 'effing company?!

If that were the case wouldn't major shareholders be leaving such companies in droves causing the share price to crash?

[SueEllen]

WHS

Don't think the changes they make would make big difference however since funds - big shareholders - don't like to vote against what the board suggests.

WHS

If the big shareholders i.e. pension funds want to protest they abstain.

[DirtyDog]

A step in the right direction?......

Yes, but it's still not going to make any difference.

If the board have a large percentage of shares, then your tiny handful isn't going to make any difference. If pension funds and other institutional investors vote with the board, your few shares isn't going to make a difference. Only if the large shareholders vote to restrain executive pay will there be a difference.

Every year, I vote against the executive pay proposal for Oracle, based on my couple of thousand shares. Since Larry Ellison still owns 25% of the company and votes in favour, I'm not holding out hope that my few will hold much sway.

[PEEL]

The problem will be that the ordinary investor doesn't actually understand the link between pay and performance. If a company loses £100mm it doesn't mean executive comp should be nothing, or even less than £5mm per exec, since the next best performing set of execs might have lost the company £200mm. Compensation should be left to a properly audited board of governers.