European Union financial services chief Michel Barnier, who hasalready won caps on banker bonuses, is seeking to give shareholdersa veto over the pay packages for executives at publicly tradedcompanies.

Barnier published measures today that call for shareholdersthroughout the 28-nation bloc to vote on remuneration policies forcompany directors at least every three years.

“It does leave you with a pretty bitter taste in your mouth whenyou see the excessive level of pay in certain cases,” Barnier toldreporters in Brussels today.

Barnier's push for more shareholder control of remuneration addsto a salvo of EU moves to rein in bonuses. Since the outbreak ofthe 2008 financial crisis, the EU has agreed to ban banker bonusesof more than twice fixed pay, and approved pay rules for managersof hedge funds and other EU investment vehicles known asUndertakings for Collective Investment in Transferable Securities,or UCITS.

The Barnier plan would also require companies to give annualreports on the application of their remuneration policy, giving theshareholders a chance to register concerns about pay structure.

National governments have made “insufficient progress' in givingshareholders a binding say on remuneration, according to thecommission, leading to an uneven patchwork of practices.

A total of 13 EU countries empower shareholders to vote on pay.France and Austria are among EU countries where no such rightexists, while in nations including Italy and Spain the vote isnon-binding, according to commission data.

The proposals are ''more onerous in some respects'' than similarrules introduced in the U.K. last year, Alexandra Beidas, anemployee incentives lawyer at Linklaters LLP in London, said in ane-mail.

The Barnier plans ''would require companies to set a ratiobetween the average remuneration received by directors compared tothe average received by the company's full-time employees and alsoset the relative proportion of fixed and variable pay which can beawarded to directors,'' she said.

Barnier is in charge of formulating draft financial rules at theBrussels-based commission, the EU's executive arm.

'Clear Indication'

Under his proposals, companies would be compelled to paydirectors in accordance with a shareholder approved remunerationpolicy. That policy should be reviewed, and submitted toshareholder vote, at least every three years.

The document setting out the policy should give ''a clearindication of the minimum and maximum amounts that can beawarded,'' as well as the ratio of fixed to variable pay.

It should also set out the maximum level of pay available todirectors, as well as what possibilities exist for the company toreclaim bonus payments for directors whose performance turns out tobe less strong than thought.

The measures would also hand shareholders more control overso-called related-party deals where a company carries outtransactions with its own managers or institutional investors.

Other parts of the Barnier plans would set minimum disclosurerules for asset managers and institutional investors, and seek tomake it easier for single shareholder companies to operatecross-border within the EU.

The plans for listed companies don't seek to impose caps on payand are focused on boosting shareholder awareness andoversight.

Barnier's proposals require approval by governments and theEuropean Parliament to take effect.

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