EUROPE – The European Parliament’s rapporteur on the new transparency directive has called for the details of corporate executives’ pension plans to be disclosed.

“Your rapporteur considers that a fundamental aspect of transparency involves company management being fully accountable for the remuneration structure of the company,” says the rapporteur, MEP Peter Skinner.

“For senior management of the company, the total value of remuneration should be specified, for example, including pension plans.”

He says that Article Four of the proposed directive on the harmonisation of transparency requirements be amended so that company annual reports must include pay details.

Skinner, in a draft report on the directive, has also backed away from forcing European companies to report on a quarterly basis, saying it is “not appropriate”.

“Well-functioning financial markets require the dissemination of reliable company information in a timely fashion, but quarterly reporting is simply not the appropriate mechanism for ensuring this.”

Skinner has proposed a “qualitative approach” to investor information. He says it’s not the frequency but the quality and relevance of information that is important. Quarterly earnings also create a focus on short-term earnings performance rather than long-term strategy, he says.

Skinner also says that custodian banks that hold securities on behalf of clients “should not fall into the scope of the directive”. Markets could be “misled” by custodians’ holdings and shareholdings could be double counted.

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