Vince Cable Tells Shareholders: Throw Out Bank Cheats

THE GUARDIAN: Bosses preside over 'moral quagmire', says business secretary, as Barclays chief Bob Diamond is summoned to face MPs

Vince Cable has urged shareholders in UK banks to rise up and purge their companies of corrupt executives, who he says have allowed "systemic abuse" to take root in the banking system.

The business secretary, writing in the Observer, says it is now clear that no one at Barclays Capital, the investment bank that triggered the market-rigging scandal, is prepared to take responsibility for endemic corruption, so the ultimate owners of banks must take matters into their own hands.

Describing the problems in UK banking as "a moral quagmire of almost biblical proportions", Cable says the government is taking urgent action, including creating a clearer separation between "casino-style investment banking" and retail banking on the high street. Ministers will this week begin a review into the libor system under which banks lend to each other and Cable hints that US-style criminal sanctions, such as the threat of prison terms, could be considered against those who abuse it.

But he says shareholder power will be crucial. "Regulators are a backstop: they don't own banks," he writes. "The governance at the top of our leading banks has been shown to be lamentably weak. No one at the top of Barclays will take responsibility for systemic abuse.

"Shareholders, the owners, have a major responsibility here. I am bringing in legislation to strengthen their control over pay and bonuses, through binding votes, but shareholders have to get a stronger grip on weak boards and out-of-control executives." » | Toby Helm, Jamie Doward and Jill Treanor | Saturday, June 30, 2012

WPP Shareholders Vote Against £6.8m Pay Packet for Sir Martin Sorrell
THE GUARDIAN: Nearly 60% of disgruntled investors vote against the WPP directors' remuneration report

Sir Martin Sorrell has suffered an embarrassing defeat at the hands ofWPP shareholders, with nearly 60% voting to reject his £6.8m annual pay packet at the company's annual general meeting in Dublin.

Sorrell, who received a 60% rise in total pay last year as well as a £5.6m windfall of shares under the company's leadership equity acquisitions plan, saw 59% of disgruntled investors fail to back the WPP directors' remuneration report at the AGM on Wednesday. A further 0.8% of votes were withheld, with the remainder in favour.

The WPP chief executive's showdown with investors is the latest in a series of clashes between UK publicly listed companies and shareholders over boardroom pay in what has been dubbed the "shareholder spring".

Sorrell's defeat is the sixth remuneration report to be rejected by shareholders this year, outstripping investor dissatisfaction in recession-racked 2009 when there were five. It is a record tally of defeats since the opportunity for shareholders to vote on the pay policies of UK public companies was introduced almost a decade ago.

The WPP chief executive, who founded the company in 1985, scoffed at the idea he might consider resigning in the wake of the defeat. » | Mark Sweney | Wednesday, June 13, 2012