The European Commission has published a proposal to amend the Shareholder Rights Directive. The proposal includes the following provisions:
- companies must disclose their remuneration policy and the individual remuneration of directors. Shareholders will have the right to approve the remuneration policy and vote on the remuneration report;
- related party transactions representing more than 5% of company assets, or transactions which could have a significant impact on profits or turnover, will be subject to shareholder approval. Smaller related party transactions representing more than 1% of assets must be publicly announced at the time of conclusion, with the publication of an independent third party report;
- proxy advisors must adopt measures to guarantee that their voting recommendations are accurate and reliable, based on a thorough analysis of all available information and unaffected by any existing or potential conflict of interest or business relationship. They must also publicly disclose certain key information relating to the preparation of their voting recommendations and, to their clients and the companies concerned, information on any conflict of interest that might influence their voting recommendations;
- intermediaries must offer companies the right to have their shareholders identified, rapidly transmit information relating to shareholders and facilitate the exercise of shareholder rights; and
- institutional investors and asset managers must, on a comply or explain basis, disclose their voting and engagement policies and certain aspects of asset management arrangements.
