Shareholders in Australia now have new powers to oppose what they see as excessive pay increases for senior executives and non-executive directors.
The first sign of the new regime may be seen when the annual general meeting (AGM) season kicks off this week.
Under new laws, company directors have to face re-election if more than 25 per cent of shareholders reject a remuneration report for two years in a row.
This new power came after some large parachutes for executives who failed to keep shareholders happy. Former Telstra CEO Sol Trujillo is one example cited after he left the telco after an unpopular tenure with $30 million in entitlements.
Now both retail and institutional shareholders will have real powers to punish boards who misjudge public and investor sentiment, by vetoing a remuneration report.
Until now, such votes have not been binding.
I spoke with Vas Kolesnikoff, chief executive of the Australian Shareholders' Association, on this morning's edition of AM.
He told me it's a brand new day for corporate accountability.