PM under fire over plan to veto lavish bonuses
David Cameron faced a backlash from business leaders after he promised to give shareholders new powers to veto lavish payouts to failed executives.
The Prime Minister's attack on City excess just ahead of the bonus season and his plans to introduce more checks on undeserved bonuses were derided as flawed and unworkable.
He promised moves within weeks to give extra powers to shareholders - notably a binding vote on top salaries - to curb the practice of authorising "golden parachutes" to departing executives, and to require companies to provide more details of managers' salary packages.
But business chiefs pointed out that by the time shareholders would get to vote on multimillion-pound bonuses at the company AGM, the money would already have been paid out to executives.
"Binding shareholder votes would simply be shutting the stable door after the horse has bolted," said John Cridland, the Confederation of British Industry's (CBI) director-general.
The issue of corporate excess has come to the forefront of the political battleground. Stephen Hester, chief executive of Royal Bank of Scotland, is likely to pick up a multimillion-pound bonus this year, it emerged yesterday.
Downing Street sources meanwhile suggested that the power for shareholders to block exorbitant payoffs would be applied only to newly-appointed executives.
The CBI doubted the wisdom of allowing shareholders to intervene in executive-pay decisions. It said it preferred the use of claw-back schemes to recover cash from poorly performing managers.
Mr Cameron told BBC1's The Andrew Marr Show that he knew executives picking up huge cheques even when their companies had failed made "people's blood boil".
He said: "What I think is wrong is pay going up and up when it is not commensurate with the success companies are having."