David Cameron has confirmed that the Government will introduce legislation aimed at curbing excessive boardroom pay, after figures revealed that directors of FTSE 100 companies saw a 49% increase in total earnings in the past financial year, taking average pay to £2.7m.
Tuesday 10 January, 2012
David Cameron has confirmed that the Government will introduce legislation aimed at curbing excessive boardroom pay, after figures revealed that directors of FTSE 100 companies saw a 49% increase in total earnings in the past financial year, taking average pay to £2.7m.
Speaking to the Andrew Marr show, David Cameron suggested that the Queen’s speech in the Spring would contain proposals for legislation giving shareholders a binding vote on executive pay packages, as opposed to their current advisory vote. He also indicated that reforms to remuneration committees were needed to put an end to “crony capitalism” where members sit on each other’s boards and approve each other’s pay increases.
However, Mr Cameron was less enthusiastic about the idea of employee representation on remuneration committees and pay ratios between the highest and lowest paid in a company. He said that pay ratios were too blunt a tool and employee representation on remuneration committees could smack of tokenism - reform of the committees themselves was key.
In September 2011 the Government published a discussion paper on executive remuneration and Vince Cable is expected to give the Government’s response this month.
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