Cable in call for transparency over bosses' pay
Published 24/01/2012 | 08:00
The Government wants shareholders to hold binding votes over executive pay, Business Secretary Vince Cable said.
He told MPs it was not Westminster's job to "micro-manage" companies but insisted there were steps it could take when there was "clear market failure".
Mr Cable said the Government planned to focus on greater transparency over pay deals, giving shareholders tougher powers, creating more diverse boards and remuneration committees, and sharing business best practice.
But he warned there was "no magic bullet" for tackling the problem.
"We cannot continue to see chief executives' pay rising at 13% a year while the performance of companies on the stock exchange languishes well behind," he told the Commons.
Mr Cable said companies would be required to publish "more informative remuneration reports" for shareholders.
There would be an obligation to highlight notice periods for executives that were longer than a year, and substantial exit packages.
Mr Cable also suggested moves to ensure that remuneration committees were more diverse - including potentially two members who had not served on boards before.
"I want to see more people appointed to boards who come from different backgrounds," he said.
Prime Minister David Cameron's official spokesman denied that it was an embarrassment for the Government that Mr Cable had been forced to come to the Commons and announce his plans a day earlier than intended.
The Business Secretary was summoned to the Commons by Speaker John Bercow to answer a question from Labour shadow business secretary Chuka Umunna about his plans.
Mr Cable had initially planned to launch his proposals in a speech to the Social Market Foundation tomorrow, prompting complaints from Labour that he was ducking parliamentary scrutiny.