News

Managing executive pay levels

The Business Secretary Vince Cable has unveiled a number of initiatives designed to curb executive pay and halt the increasing gap when compared with the salary of average workers.

Amongst the proposals under consideration is giving shareholders a binding vote on the company's salary policy, notice periods and exit packages – a step up from their current advisory role.

Other measures under consideration include requiring firms to justify high salaries in their remuneration reports, the publication of all directors' wages, increasing the diversity on company boards and the introduction of claw back policies, which would enable firms to recoup bonuses which are later proved to be unwarranted.

Mr Cable acknowledged that it was "not the government's role to micro-manage company pay", but added that there were things ministers could do to "address what is a clear market failure".

He added that companies and shareholders needed to accept more responsible in order for progress to take place, with businesses needing to accept the necessity for reform.