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Janet Williamson

Janet Williamson

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.

Web: http://www.touchstoneblog.org.uk
  • Pensions & Investment

    Talk of a ‘shareholder spring’ is premature

    9th May 2012 — Filed under: Pensions & Investment

    Janet Williamson 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no detail on what proposals will be included, with one exception: section 439(5) of the Companies Act will be repealed, which effectively paves the way for a binding shareholder vote on future executive pay, one of the Government’s key proposals as set out in its recent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.

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  • Pensions & Investment

    Shareholders are finally exerting pressure on executive pay, but it’s not enough

    2nd May 2012 — Filed under: Pensions & Investment

    Janet Williamson 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.

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  • Economics

    Stripping Fred Goodwin of his peerage is no substitute for tackling excessive executive pay and reforming the financial sector

    2nd February 2012 — Filed under: Economics

    Janet Williamson 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.

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  • Pensions & Investment

    Shareholder votes alone will not curb executive pay

    9th January 2012 — Filed under: Pensions & Investment

    Janet Williamson Janet Williamson

    David Cameron has grabbed the headlines by announcing that his Government is going to take action on executive pay. However, despite denouncing ‘market failure’ in the setting of executive pay, the only clear policy commitments he made were to give shareholders a binding vote on executive pay and more transparency.

    Why does this matter? Because if more disclosure and more power for shareholders is all that we are going to get from this Government on executive pay, it simply won’t work.

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  • Economics

    Worker representation on remuneration committees moves one step nearer

    19th September 2011 — Filed under: Economics

    Janet Williamson Janet Williamson

    Vince Cable has today launched a Discussion Paper on executive pay, which includes a question on employee representation on remuneration committees. Not quite a firm proposal, but the first time I am aware of that the possibility of worker representation on remuneration committees has been put forward in an official Government document.

    The TUC has been campaigning for worker representation on remuneration committees for over 15 years. There have been times in the past when we have been derided for putting forward a proposal that appeared to go so strongly against the grain of the status quo. It shows that ideas that are far outside the mainstream political discussion can inch slowly inwards and gain real traction over time.

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  • Pensions & Investment

    The boardroom and the rest: the real pensions divide

    7th September 2011 — Filed under: Pensions & Investment

    Janet Williamson Janet Williamson

    The pay gap between Britain’s boardrooms and the rest of the workforce is mirrored by an equally disturbing gulf in pensions provision, as shown in the TUC’s latest PensionsWatch report published today. The report looks at pension provision for directors in the FTSE 100.

    For directors with defined benefit pensions, the average transfer value – the amount that would be taken out of the pension scheme if the director wanted to leave the scheme – is a massive £3.91 million. The average directors’ accrued pension – the amount that would be paid out each year on retirement based on current scheme membership – is £224,121 per year, over 23 times the average occupational pension. What is particularly shocking is that directors are frequently not in the same pension schemes as their own staff, and, despite their higher salaries, their pensions are often set up on much more generous terms.

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  • Economics

    Is the tide turning on executive pay?

    15th June 2011 — Filed under: Economics

    Janet Williamson Janet Williamson

    Ed Miliband has put forward two proposals to tackle executive pay, both of which the TUC has campaigned for over many years. In a speech on Monday, the Labour leader said that under a Labour government, companies would be required to publish the ratio of their directors’ pay to average company employee pay.

    The gap between top company directors’ pay and the pay of their own employees (and indeed average earnings in the economy as a whole) has risen inexorably over recent years, despite a provision in the Corporate Governance Code that says that remuneration committees should take into account pay and conditions elsewhere in the company.

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  • Economics

    More for Less: pay at the top

    18th May 2011 — Filed under: Economics

    Janet Williamson Janet Williamson

    The High Pay Commission (HPC) – whose commissioners include TUC Deputy General Secretary Frances O’Grady – has brought out its interim report. It includes a blizzard of charts, figures and tables that clearly establish that executive pay has increased rapidly over the last fifteen or so years and has left the pay of average workers trailing far behind. Average FTSE 100 CEO total pay was 145 an average worker’s salary in 2010, and the HPC calculates that if current trends continue by 2020 the multiple will be 214.

    The report also shows that rapid rise in executive pay does not reflect company performance or returns to shareholders: earnings per share actually fell by 1% per year between 1998 and 2009, while earnings of FTSE 100 CEOs rose 6.7% per year over the same period. To sum up: executive pay awards are neither fair nor linked effectively to performance. In other words, the current system is not working.

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  • International

    The EU is asking the right questions on corporate governance

    6th April 2011 — Filed under: International

    Janet Williamson Janet Williamson

    The European Commission has just published its Green Paper on Corporate Governance (closing date for responses 22 July). It covers three areas: the board of directors, shareholders and the role of comply or explain in corporate governance.

    From a UK perspective, the inclusion of this last section is interesting, because the concept of ‘comply or explain’ as a means of ‘enforcing’ codes – in other words, either do what the code says or explain why you haven’t – has had a significant role in UK corporate governance since the 1990s. The UK Code of Corporate Governance is ‘enforced’ using comply or explain, and many in the UK see the Code and the flexibility of its enforcement as a strength of the UK system. However, it is also the case that under ‘comply or explain’, some areas of the Corporate Governance Code have simply been flouted, notably the requirement to take into account pay and conditions elsewhere in the group when setting directors’ pay, which is routinely ignored by companies both in terms of compliance and disclosure. Comply or explain does not always work, and it is good to see the European Commission question the extent to which it should be rolled out further within the EU.

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  • Pensions & Investment

    Where were the banks in the budget?

    23rd March 2011 — Filed under: Pensions & Investment

    Janet Williamson Janet Williamson

    Despite the banking sector’s major contribution to the financial crisis that has provided the context for the last four Budget Days, the banks were barely mentioned by George Osborne in his budget speech. And the Budget itself devotes just six paragraphs of its 104 pages to the banking sector, in which it basically repeats what has already been agreed under the so-called ‘Project Merlin’.

    There is no mention of plans for Northern Rock or the other state-owned banks, and the opportunity to provide some flesh on the bones of Project Merlin has not been taken, perhaps because there is none to be provided.

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