Europe is planning to give shareholders the power to limit top executive pay.
The European Commission released proposals Wednesday that would require Europe's 10,000 publicly listed companies to hold binding votes, and to say how employee and executive pay compares.
"There is an insufficient link between management pay and performance and this encourages harmful short-term tendencies," the commission said in a statement.
The EU will stop short of setting a regional cap. But pay policies at each company will be subject to shareholder approval and must include "a maximum level for executive pay," it said.
Lawmakers are responding to popular pressure over growing inequality, driven in part by the widening gap between what CEOs and their employees make.
Campaigners argue that any positive effects on employee motivation from the prospect of earning the big salaries are outweighed by lower staff morale when the differentials are stretched too far.
No comments:
Post a Comment