Hans Hoogervost, chair of the International Accounting Standards Board (IASB) is the latest high profile executive to come under fire over the size of his remuneration package, with a leading member of the European parliament’s economic affairs committee (ECON) calling for him to take a pay cut
German Green Party MEP Sven Giegold was responding to the exposure draft of proposed changes to the International Financial Reporting Standards (IFRS) Foundation, the oversight body for IASB, in a letter which says there is a ‘strong need for further measures to enhance democratic legitimacy, transparency, accountability and integrity’.
It concludes by stating: ‘Finally, we are of the opinion that the remuneration of the IASB Board members does not correspond with the public interest orientation of IFRS/IASB.’
The letter singles out the level of compensation paid to Hoogervorst, IASB’s chair, who was paid £558,200 according to the standards setter’s 2015 annual report, up from £554,000 the previous year.
The vice chair had a £492,200 compensation package, while IASB paid out an average of £458,400 for other full-time IASB members. In 2014 the trustees did not replace two IASB members who completed their terms in June, reducing the number of IASB members from 16 to 14.
Giegold states: ‘Therefore, we call for reducing immediately any excessive remuneration’.
The demand comes as there is growing disquiet among investors and the public over high levels of executive remuneration and its effects on corporate culture.
The letter covers several other topics, including the need for the Foundation to aim for a more diversified and balanced financing structure, including on the basis of fees and public sources, and calls for a more diversified board.
Sven Giegold’s letter is here.
