One of Europe’s largest activist investors calls for higher pay for NEDs to revive the UK equity market
Cevian Capital has called for higher pay for non-executive directors (NEDs) in UK boardrooms as part of efforts to revive growth at British companies and reverse the decline of the London market. It said that pay for NEDs should increase to attract and retain the best people including from international rivals.
Cevian also argued directors should be able to afford to buy shares in their companies, giving them a more direct interest in the success of the business.
Commenting, Tom Matthews, head of White & Case’s EMEA Activism practice, said: “Back in November, the FRC backed both encouraging NEDs to build personal shareholdings and share-based remuneration. Activist shareholders with stakes in UK companies, particularly those based in the US, had long complained that NEDs in the UK were not given sufficient incentive to help drive the success of the businesses they oversee by owning shares.
“Cevian’s call for higher pay, coupled with broader share ownership, could help UK companies attract and retain higher-calibre international talent, better align NEDs with shareholders and strengthen London’s global competitiveness. It could also help improve the performance of UK listed companies and create greater shareholder value at a particularly important time, when UK public markets remain a highly attractive hunting ground for overseas bidders and activist investors who continue to see value in the UK market and its world-class businesses that is not reflected in their trading valuations.”