MOST of your readers will be shocked and bewildered by the announcement that the biggest UK companies are paying CEOs millions of pounds per annum ("Chief executives cash in as median pay rises to £3.9m", The Herald, August 15). Many payments go into tens of millions. Some may wonder how this situation has come about after successive governments of both parties have promised for many years to investigate and curb these excesses.
The principle reason behind this is the growth of private shareholders’ shares being held in nominee companies. While this is convenient for shareholders it means that companies have no knowledge of who their private shareholders are. This disenfranchises the shareholders and they receive no information from the companies they part own; no direct dividends; no knowledge of companies’ AGMs and, worst of all no voting rights. Therefore the company can put through whatever ludicrously obscene payments they like at AGMs without the scrutiny of the actual owners who would certainly object vociferously to this misuse of their money.
It can easily be curbed in this day of the internet by insisting that share registers record shareholders’ details and contact them directly, as was the case in the past. It would be more costly for the companies but essential to return to good corporate governance and holding executives to account.
Nigel Dewar Gibb,
15 Kirklee Road, Glasgow.
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