Janet Williamson's Archive 
Janet is TUC Senior Policy Officer responsible for policy on institutional investment, corporate governance and corporate social responsibility.
She also contributes to TUC pensions policy and campaigning and is a trustee of the TUC Superannuation Society.
Janet Williamson
The TUC, UNISON and Unite have launched a new group that aims to put union values at the heart of corporate governance.
From 1ST April, the pension funds of the TUC, UNISON and Unite will vote together at FTSE 350 AGMs. We have developed a set of Trade Union Voting and Engagement Guidelines based on trade union policies that we will follow when voting at companies in which our pension funds hold shares.
Janet Williamson
The TUC has long been concerned that the tax deductibility of interest payments on corporate debt encourages companies to carry high levels of debt and fuels highly-leveraged company buyouts.
So our ears pricked up when George Osborne acknowledged in his Budget speech that the UK tax system ‘biased debt financing over equity investment’, implying – so we assumed – that he was going to take steps to address it.
However, his next sentence “So today I am abolishing altogether stamp duty on shares traded on growth markets such as AIM” was a complete non-sequitur which will do nothing to address the tax advantages of debt financing.
Janet Williamson
The Chancellor has announced that the first £2,000 of shares given to workers who become ‘employee shareholders’ will be exempt from both national insurance and income tax.
Plans for a new ‘employee shareholder’ scheme were announced at the Conservative Party Conference. Under the scheme, employers will be able to offer employees at least £2,000 of shares in their company in exchange for giving up certain employment rights, including protection from unfair dismissal, the right to statutory redundancy pay, and the right to request flexible working and time to train. In addition, ‘employee shareholders’ will be required to give 16 weeks’ notice of their intention to return from maternity leave, while other employees are required to give eight.
Janet Williamson
The Labour Party has today published an independent review Overcoming Short-termism within British Business carried out by Sir George Cox, a former Director General of the IoD.
There is much to welcome in the review. In particular, it makes a powerful case that short-termism, which it defines as ‘the pressure to deliver quick results to the potential detriment of the longer-term development of a company’ is a significant impediment to UK business and economic growth. Importantly, it draws on surveys carried out especially for the Review to argue that there is a consensus among both business and trade union representatives on both the existence of short-termism and its effects, which include a disincentive to think and plan long-term, a disincentive to invest, a disincentive to develop new products, a disincentive to undertake research and a disincentive to recruit.
Janet Williamson
The Autumn Statement refers to two different policies on employee share ownership that are contradictory but are being promoted simultaneously by the government.
The first follows from a review of employee ownership, launched by Nick Clegg in a speech earlier this year that talked about creating what he called a ‘John Lewis economy’. The Review, carried out by Graham Nuttall, set out a number of proposals that aim to increase the number and proportion of firms that offer their employees a substantial body of shares, or are indeed completely owned by their employees.
Just a few months later, the Chancellor announced at the Conservative Party Conference a new policy whereby employers would be able ask their workforce to give up key employment rights, including rights in relation to unfair dismissal, in exchange for shares worth from £2,000 to £50,000, which will be free from capital gains tax.
Janet Williamson
The TUC is publishing its tenth Fund Manager Voting Survey today. Once again the Survey shows just how much fund managers vary in their approach to voting at the AGMs of companies whose shares they hold.
Pension fund members and trustees can use the Survey to see how their fund manager compares to others in terms of their approach to voting and engagement.
Janet Williamson
Despite the so-called ‘shareholder spring’ and an increased focus on executive pay from both media and government, the gap between the pay of UK company directors and the rest of the UK’s workforce has continued to grow. Figures from IDS last week showed that total earnings for FTSE 100 directors grew by 10% at the median last year and by an average (mean) of 27%. Average earnings across the economy as a whole rose by just 1.7%.
Part of the problem is that while it is hard to find anyone who does not agree that something is wrong with executive pay, there are very different perceptions of what the problem actually is. There is a powerful argument promoted by business representatives in particular, and also to some extent by successive governments and investors, that it does not matter how high executive pay is so long as it is linked to performance. According to this view, the key problem with executive pay is that it has continued to rise in the face of poor company performance.
This is not how the TUC sees it. In our view, the key problem is that executive pay is simply too high, both in relation to pay for ordinary employees in the same company and in relation to awards across the economy as a whole. We believe that current levels of executive pay over-reward those at the top of organisations too much in relation to those at the middle and bottom.
Janet Williamson
The Government has confirmed in the Queen’s Speech that it plans to legislate on executive pay in the coming Parliament. The provisions will be included in the Enterprise and Regulatory Reform Bill, and, according to the Government, aim to ‘strengthen the framework for setting directors’ pay’. At least that’s an aim we can all agree with.
There is practically no detail on what proposals will be included, with one exception: section 439(5) of the Companies Act will be repealed, which effectively paves the way for a binding shareholder vote on future executive pay, one of the Government’s key proposals as set out in its recent consultation. Introducing a binding vote on future pay is a sensible step which the TUC supports. However, unless shareholders exert a much tougher approach to remuneration reports than they have done hitherto, there is a danger that in practice it will have very little impact.
Janet Williamson
Over the past week, we have seen significant shareholder revolts on executive pay at Barclays, Xstrata and Man Group. At Aviva’s AGM on Friday another big shareholder rebellion on pay is expected.
Yet what is notable is that despite the media portrayal of angry shareholders, a majority of shareholders did in fact vote in favour of the remuneration reports in question. When abstentions are discounted – and in law abstentions do not count towards the result – 73% of Barclays’ shareholders and 63% of at Xstrata’s shareholders voted in support of the companies’ remuneration reports. While the Aviva board may be expecting to receive a bloody nose on Friday, it is again likely that despite some significant opposition, the remuneration report will be carried.
This is the great contradiction of UK corporate governance: shareholders have considerable powers with which to monitor companies and hold them to account, but are reluctant to use them. This leaves a dangerous vacuum that allows boards to set their own pay more or less as they wish.
Janet Williamson
Yesterday’s papers were full of the news that Fred Goodwin has been stripped of his knighthood awarded in 2004 for “services to banking”. However pleasing this may be, it is no substitute for taking effective action to tackle excessive executive pay and reform the financial sector so that it serves the needs of the real economy rather than itself and its top earners. The key issues here are not the bonuses or peerages of a few individuals, however much these might rankle; tackle these in isolation, and they will simply be replaced by the next ‘pariah’. What we need is wholesale reform of the system of setting executive pay, to bring an end to directors’ remuneration rising year upon year in relation to the pay of ordinary workers within the same companies and across the wider economy. This is currently happening throughout the corporate sector as a whole, and not just at RBS.
