The Council did not stop to work on this matter and has now published a report summarising the actions of member states and the Commission with regard to the regulation of executive pay:
The report lists measures of 20 EU member states, and if you are interested how you country is trying to interfere in private business for (mostly) symbolic reasons, have a look in the document.
- Following discussions earlier this year in the Eurogroup and ECOFIN of national frameworks regarding executive pay against the background of the Commission recommendation, a large number of Member States have strengthened legislative measures and/or codes of conducts, or plan to do so in the near future.
- In the context of national rescue packages for the financial sector, many Member States have included in their schemes provisions regarding the remuneration of executives in the concerned institutions. They aim at limiting the compensation and/or adjusting the incentive structure to limit excessive risk-taking and to gear decision-making towards longer-term profitability.
- Another focus of measures undertaken recently is on improving transparency of compensation components, in some countries disclosing up to the individual level, to give shareholders and responsible committees more information - and partly also introducing a shareholders' vote - on remuneration issues.
- Some countries have also taken action with respect to severance pay, either limiting the compensation as such or linking it to specific performance requirements.
- One country [Remark: this is Italy; JF] has revised the favourable tax regime in place for variable pay components, subjecting it to the personal income taxation.
The European Commission, as we learn, is also working on the topic and we can expect "initiatives on these issues to be part of the "financial markets for the future" package scheduled for early 2009".
Altogether, I am not a big fan of such kind of politics, since they are full of symbolic and populist measures that (luckily) mostly just scratch on the surface in order to satisfy popular demands without alienating businesses.