SHAREHOLDERS IN German companies could be given a vote on executive pay under proposals being debated by parliament in one of the toughest measures considered in Europe to tackle excessive boardroom compensation.

A vote on pay would be a big victory for shareholders who have often complained of having little influence over management in Germany. It would also add to the pressure for other European countries to follow the Netherlands, the UK and France in giving investors “a say on pay”.

A group of Christian Democratic MPs allied to chancellor Angela Merkel is proposing that supervisory boards be allowed to give annual meetings a non-binding vote over the packages of executive directors.

News of the German discussion comes days after investors in Royal Dutch Shell rejected the Anglo-Dutch oil company’s remuneration policy in a stinging rebuke.

Although the vote was non-binding, it was a public relations embarrassment for Shell. – (Copyright The Financial Times Limited 2009).