Deep splits among EU lawmakers over shareholder rights reforms

LONDON (Reuters) - European Union lawmakers are deeply divided over plans aimed at encouraging more long-term investment in the bloc's companies, fuelling uncertainty about what will be decided and when.

The European Commission has drafted revisions to the EU's shareholder rights law in a bid to promote a long-term approach among investors that would put companies on a more stable footing.

But the lawmaker steering the matter through the European Parliament wants to make significant changes, sparking a fierce debate within the legislature on Tuesday.

Centre-left Italian and former labour union leader Sergio Cofferati wants to give employees and not just shareholders a view on planned bonuses for executives.

There should also be a "mechanism" giving investors who agree to hold shares for two years or more benefits such as additional voting rights, he has proposed.

Centre right and Liberal lawmakers told parliament's legal affairs committee on Tuesday they opposed his suggestions.

"Can anyone really truly claim that marginal changes in directors salaries is what will determine the performance of EU companies in a global economy?" said Cecilia Wikstrom, a Swedish Liberal member.

"We let companies spend their time running their businesses instead of finding themselves busy filling out obligations created by over-ambitious politicians and bureaucrats of Europe."

Angelika Niebler, a German centre-right member, said it would be difficult to reach a compromise in parliament. "I have the impression that in the Cofferati report we are going to get a lot more bureaucracy rather than a reduction," she said.

French Green lawmaker Pascal Durand backed Cofferati, however, saying his proposals would bring the long-term back into investor thinking.

The depth of the divide means Cofferati's plans will probably have to be watered down to get through the assembly before a deal with member states, who have joint say, can be negotiated.

"The opinions I have heard are very far apart," Cofferati said.

A European Commission representative advised the committee not to focus too much on employee participation in companies.

"We know very well it's a delicate question, very sensitive to member states," she said.

While the executive backed having incentives for investors to think long term, it said it would be launching its own public consultation on this in coming months and publish a report by the end of the year.

The legal affairs committee is due to vote on the draft law on March 24.

(Editing by Mark Potter)

By Huw Jones