Sven Giegold, a leading member of the European Parliament’s Economic Affairs Committee (ECON), has taken the battle over excess pay to the International Accounting Standards Board (IASB) with a demand for the board’s chairman to take a pay cut.
In a strongly worded letter to the IASB’s parent body, the International Financial Reporting Standards Foundation (IFRSF), the German Green party member writes: “[We] are of the opinion that the remuneration of the IASB board members does not correspond with the public interest orientation of IFRS/IASB.
“[T]he IASB chairman Hans Hoogervorst received $875,458 (€784,932) as compensation from the IFRS Foundation in 2014. Therefore, we call for reducing immediately any excessive remuneration.”
The demand comes as disquiet grows among investors and the public over high levels of executive remuneration and its effects on corporate culture.
Giegold’s intervention comes as the IFRSF prepares to analyse feedback on its latest corporate governance review.
This latest exercise is the Foundation’s fifth in roughly 13 years.
In April, the European Parliament passed a highly critical own-initiative motion in which it called for improvements in the IFRSF’s democratic legitimacy, transparency, accountability and integrity.
In his letter to the Foundation, Giegold writes: “With regard to the IFRS Foundation and the IASB, this concerns, inter alia, public access to documents, open dialogue with diverse stakeholders … the establishment of mandatory transparency registers and rules on transparency of lobby meetings, as well as internal rules, in particular the prevention of conflict of interests and diversity of hired experts.”
His intervention is the latest round in a battle between the European Parliament and the Foundation’s over public accountability.
In May 2014, ECON committee chairwoman Sharon Bowles MEP warned the Foundation it was drinking in the last-chance saloon.
She said: “My parliamentary colleagues have done a great job in highlighting the much-needed reform of these accounting quangos, which will improve public confidence in how accounting standards are implemented in Europe.”
Ahead of her comments, the Parliament cleared €43m worth of EU financing over six years for the London-based IASB and other EU accountancy interests.
Emails obtained by IPE show the Foundation staff, on the instruction of the organisation’s chief executive, Yael Almog, blocking requests for further transparency from MEP Syed Kamall.
In one email dated 26 March 2014, IFRSF trustee affairs director David Loweth wrote: “As Article 8 of the [funding] Regulation makes clear, the Commission and its representatives and the Court of Auditors have the power of audit over the IFRS Foundation, as with any other beneficiary of Union funds.”
The email continues: “Your request for our annual budget appears to us to be one that cuts across the role of the Commission, both as a member of the Monitoring Board and as set out in the Regulation.
“Given that the legal responsibility under the Regulation is vested in the Commission, it is important we avoid having a parallel review process with both the Commission and the Parliament.”
The Foundation also refused to reveal detailed information from its conflicts register to Kamall’s office.