A leading fund management group has thrown a hand grenade into the City’s culture of cosy employment deals for directors by demanding that all company bosses are hired on notice periods of less than 12 months.
In a defiant move inspired by perceived “rewards for failure” at Tesco, Old Mutual Global Investors threatened to vote against any company that has failed to shorten service contracts for main board directors to under a year by next March.
Old Mutual, which manages about £4.7 billion of assets held in British shares, said that it would voice its opposition to lengthy notice periods by voting against a company’s remuneration report at its annual shareholder meeting.
Paul Emerton, the head of UK stewardship and governance at the fund manager,