{"id":88425,"date":"2018-01-28T00:15:13","date_gmt":"2018-01-28T00:15:13","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=8fe9072d9b67dfd446482048e1ac1695"},"modified":"2018-01-28T00:15:13","modified_gmt":"2018-01-28T00:15:13","slug":"news-story-government-to-research-whether-companies-buy-back-their-own-shares-to-inflate-executive-pay","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=88425","title":{"rendered":"News story: Government to research whether companies buy back their own shares to inflate executive pay"},"content":{"rendered":"<div class=\"govspeak\">\n<ul>\n<li>New research to address concerns companies may be repurchasing shares to artificially inflate executive pay<\/li>\n<li>Study forms part of the Government\u2019s corporate governance reforms and wider Industrial Strategy<\/li>\n<li>Announcement helps maintain the public\u2019s trust in big business and corporate standards<\/li>\n<\/ul>\n<p>New research into whether some companies are repurchasing their own shares to artificially inflate executive pay has been announced today by the Government.<\/p>\n<p>A share buyback is where a company buys back its own shares from the market, often to reduce the number of available shares in order to increase their value. While there are a number of valid reasons why a company would use these schemes, there are concerns that a minority of companies are using them to inflate executive pay and that they can crowd out investment.<\/p>\n<p>This new research will help to understand how companies use share buybacks and whether any further action is needed to prevent them from being misused.<\/p>\n<p>This review is part of the broader package of corporate governance reforms announced in August 2017 to address concerns that executive pay can sometimes be disconnected from company performance.<\/p>\n<p>The Government has appointed consultants PwC to undertake the research into share buybacks and will be supported by Professor Alex Edmans, a leading academic at the London Business School. The findings will be published later this year.<\/p>\n<p>Business Secretary Greg Clark said:<\/p>\n<blockquote>\n<p>The UK is rightly recognised as having a world-leading business environment and responsible business practices \u2013 a key part of our Industrial Strategy.<\/p>\n<p>But there are concerns that some companies may be trying to artificially inflate executive pay by buying back their own shares.<\/p>\n<p class=\"last-child\">This review will examine how share buyback schemes are used and whether any action is required to prevent them from being abused.<\/p>\n<\/blockquote>\n<p>As the part of last year\u2019s corporate governance reforms, the Government announced it would:<\/p>\n<ul>\n<li>support the Investment Association\u2019s world-first public register of FTSE-listed companies where more than one fifth of shareholders have opposed resolutions on executive pay packages and other issues;<\/li>\n<li>introduce new legislation this year requiring companies to annually report and explain the pay ratio between chief executives and their UK employees;<\/li>\n<li>ask the Financial Reporting Council to find new ways for companies to engage with their employees as part of the revised UK corporate governance code;<\/li>\n<li>appoint a Chair of a group to draw up the first-ever corporate governance principles for large private companies \u2013 the Chair will be announced shortly.<\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>New research will help the Government to understand how companies use share buybacks<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/88425"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=88425"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/88425\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=88425"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=88425"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=88425"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}