Sustainable remuneration policy is a hot topic in the area of corporate governance and the target of growing interest on the part of investors, increasingly attentive to the management of the companies in which they invest. Top management’s salaries, in particular, have long been the subject of heightened debate due to the difficulty in linking the firm’s results with its pre-announced targets and as a question of fairness and proportionality.
For Etica Sgr transparency of pay differentials between lower paid workers and upper management is an important criterion of evaluation, demanded by shareholders’ at all the Shareholders’ Meetings in which we vote. Indeed, we monitor all the businesses in our portfolios to make sure that remuneration is always commensurate with results and performance, even in the socio-environmental sphere.
This is the reason why Etica has decided to support an initiative sponsored by the ICCR by signing a letter to the SEC, the US stock market regulator, to insist that US listed companies’ obligation to publish the ratio between the CEO’s salary and the average employee’s wage be reinstated from 2018. This is a significant piece of information helping shareholders to make informed decisions and in terms of engagement and transparency, which is difficult to achieve otherwise. Unfortunately, this obligation was recently thrown into question by changes inside the SEC and following the election of the new president.
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Social and governance