The Church of England and a group of charities have joined together to urge investors to vote during the 2012 AGM season on executive remuneration packages that have risen excessively.
With the main part of the 2012 AGM season yet to come, the Daily Telegraph has published a letter from the Church Commissioners for England and a group of other charity organisations which reminds charity and other investors of the shareholder rights they have at their disposal to shape company practice.
Andreas Whittam Smith, First Church Estates Commissioner, said: “Until now, charities’ contributions to the public debate about the issue of executive remuneration have been fairly muted. However, with the AGM season upon us, the Church Commissioners and a substantial coalition of other charities wish to put their concerns on the record. They feel that this is the right time for charities to make their feelings on the issue known in accordance with their charitable missions.”
Individual organisations within the group rely heavily on the income and capital returns generated by their investment to support beneficiaries and meet charitable objectives. As these investments tend largely to consist of real assets, including equity holdings, the members of the group hold shares in many of the UK’s publicly listed companies.
Richard Nunn, Convenor of the United Reformed Church Investment Committee and Chair of the Church Investors Group, said: “The signatories to the letter believe that executive remuneration is rising out of proportion both to the rewards to shareholders and to the perceived benefits to society. We therefore wish to raise awareness of the rights attached to share ownership. We encourage those charities that have not already done so to take steps to ensure that the voting and engagement work carried out on their behalf by asset managers is in keeping with their own standards and objectives.”
Further information:
Louis Henderson [020] 7898 1326
Notes for editors
The text of the letter published in the Daily Telegraph on 19 April is as follows:
SIR – We urge investors, particularly fellow charity investors, to take close interest in how their investment managers are acting on their behalf on the issue of executive remuneration.
Charity investors rely heavily on the income and capital returns generated by investment portfolios. We are long-term investors. While we believe that business leaders should be rewarded for success that benefits shareholders and society, we are concerned that rewards to executives have been rising out of proportion with rewards to shareholders who own these companies and whose investments are at risk – as highlighted in the recent High Pay Commission report.
Concerns about executive pay are indicative of a wider malaise in corporate governance standards. As shareholders, we have rights to contribute to the governance of companies in which we invest. We believe it is our duty to use these rights.
The problem of excessive executive pay has become so serious that we have resolved to work with our investment managers to ensure that the remuneration policies of the companies we invest in are aligned with our interests, transparent, linked to performance, and appropriate in the context of each company. We hope that other charities and investors will feel empowered to do the same as the AGM season gets under way.
Church Commissioners for England (Andreas Whittam Smith, First Church Estates Commissioner)
Barrow Cadbury Trust (Sara Llewellin, Chief Executive)
Joseph Rowntree Charitable Trust (Susan Seymour, Chair of Investment Committee)
Kent, Surrey and Sussex Air Ambulance Trust (Tony Monteuuis, Chairman)
LankellyChase Foundation (Nicholas Tatman, Chair)
The Baptist Union of Great Britain (Malcolm Broad MBE, Treasurer)
The London Community Foundation (Don Norris, Treasurer)
Trust for London (Peter Williams, Chair of Trustees)
United Reformed Church (Richard Nunn, Convenor of the United Reformed Church Investment Committee)
Bible Society (James Catford, Group Chief Executive)
CBF Church of England Funds (Robin Broadhurst CBE, Chair)
Hospice in the Weald (Rob Woolley, Chief Executive)
Richmond Parish Lands Charity (Jonathan Monckton, Director)