A real role for shareholders and NEDs?

It's the bankers' bonus season. Data published by the European Banking Authority shows that an average banker based in London receives bonuses of 370% times their salaries. It is no wonder then that the new EU cap of 100% of salary for bonuses has been sending the sector into a flurry in the attempt to ensure that bankers do not suffer a reduction in pay.

It looks like most of the banks will be asking their shareholders for approval to pay out bonuses of twice their salaries and other ways of paying additional payments.

Their is a real role here for shareholders and NEDs to enthusiastically challenge the Executive reflecting some of the concerns from other stakeholders. NEDs could ask:

• How much money has been paid to consultants to provide advice on executive pay and terminology ("allowance" etc) to overcome the restrictions?
• How much time and intellectual resource have been expended by the executive to protect themselves?
• What's the opportunity cost of these resources being diverted away from customer focus, cultural change and engendering ethical behaviours?
• How do they believe this helps build trust in their bank and the sector as a whole? (Bearing in mind that executive pay is the most commonly identified issue to address in business:see IBE Business Ethics survey February 2013).

If the shareholders and NEDs are really committed to change then they have the opportunity to make a stand. Bearing in mind most of them fall into the same camp, it is unfortunately unlikely.