Directors of big Dutch bourse-listed companies are getting a taste of their own medicine. Their core message has always been: our sole goal is to create shareholder value. That is until it comes to their own pay packets.

Excessive pay rises for directors of underperforming companies have little to do with creating shareholder value.
So what’s changed?
The arguments used by the executives are the same. They need to pay salaries in line with those of top US companies otherwise they cannot attract top talent. And if the company performs poorly there is always another reason for paying executives a fat bonus.
The difference now is that international investors, who account for 75% of the shareholders of Dutch companies, are beginning to throw their weight about. This has led to remuneration packages for electronics group Philips and office supplies concern Corporate Express being stymied.
Now banking and insurance group Fortis is in trouble for not putting its 73% pay rise and bonus package for CEO Jean-Paul Votron on the agenda of its shareholders meeting. Shareholders are angry about the award and could deliver a motion of no confidence in the board.
There’s nothing like shareholder democracy to galvanise the true workings of capitalism.