Trade Union Share Owners – unions unite to vote at company AGMs
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.
At the moment, when fund managers cast their votes at company AGMs, they rarely reflect the views of the people whose money they are ultimately investing. That’s why executive pay has continued to rise, despite the fact that an ICM poll last year showed that only seven per cent of people thought that company directors should be paid more than £1 million a year. Developing and following our own voting guidelines gives us the opportunity to reflect our own values when voting and take account of issues such as fairness and equal opportunities that are central to the trade union movement.
Unions have long been critical of the growing gap between executive pay and the pay of ordinary employees in the same companies. Trade Union Share Owners will vote against remuneration reports where top directors earn more than 20 times their average employee earnings and where company directors are offered pay rises that are out of line with those of their staff.
The TUC has long argued that incentive pay does not lead to improved performance and has been a major contributor to excessive rises in directors’ pay. Trade Union Share Owners will vote against remuneration reports where incentive pay exceeds 10% of the total and will only support incentive schemes that are open to all staff on the same basis.
Currently, very few board positions are publicly advertised, which contravenes equal opportunities best practice and contributes to the fact that directors are generally drawn from a narrow range of backgrounds. It is a long-standing TUC demand that all board positions should be publicly advertised. Trade Union Share Owners will vote against the Chair of the Nominations Committee unless it is clear that recruitment for board positions has involved advertising positions publicly.
We hope and expect that other unions will join Trade Union Share Owners and our doors are open to other organisations that want to use the power of their pensions to make a difference. This is just the beginning!