Image: Aleem YousafTheresa May's plans to crackdown on excessive executive pay in the City have received backing from one of the UK's biggest fund managers.
Fidelity International, which manages around £185 billion worth of assets, said the Prime Minister's pledge to make shareholder votes binding would give investors more influence over company policy.
Currently, shareholders votes on matters like executive pay are advisory, not binding, meaning boards can ignore the results if they wish. Earlier this year, a number of firms saw their shareholders revolt over plans to give chief executives a pay rise, often despite job cuts and weaker profits.
Ms May also wants to enforce greater transparency over bonus targets and the gap between chief executive and 'shop floor pay'.
Dominic Rossi, Fidelity's global chief investment officer of equities, said: "We first called for an annual binding vote in 2012. Extending shareholder powers even further will add significant momentum to our efforts to better align executive pay rewards with shareholder interests."
Fidelity warned companies in 2013 that it would start voting against proposals to give executives higher pay and bonuses unless they were forced to hold shares for at least three years before cashing them in. At that time, just 17 of the FTSE 100 required executives to hold their shares for at least three years, four of which required them to be held for a minimum of five years. Now, 48 have a five year commitment and another 17 have opted for three years.
