Belfast Telegraph

Excess of fat-cat bosses 'unacceptable face of capitalism' - Theresa May

Fat-cat bosses whose huge pay rises outstrip the performance of their companies have been branded the "unacceptable face of capitalism" by Prime Minister Theresa May as she prepares to set out new measures to curb boardroom excess.

Mrs May warned that the "excesses and irresponsibility" of a minority of executives was undermining public confidence in the free-enterprise economy and "damaging the social fabric of our country".

She warned it risked fuelling support for far-left policies of state control of industry and high taxation.

Mrs May announced plans, to be spelt out in detail later in the coming week, for reforms to name and shame firms where shareholders have rebelled over executive salaries and bonuses and to ensure that the voice of workers is heard in the boardroom.

Sources close to the Prime Minister dismissed reports that Mrs May had set August 30 2019 as a deadline to hand over the reins of power to a successor.

As the PM conducted a charm offensive on Tory MPs by inviting them for drinks at her country residence in Buckinghamshire, the Sunday Mirror quoted one attendee as saying: "It's clear she won't lead us into another election and will be gone by September 2019.

"She invited MPs to Chequers to ensure there isn't a ­leadership contest in the meantime."

But a senior Tory source retorted: "I think we've hit peak silly season with this story."

Writing in the Mail on Sunday, Mrs May stressed her support for the majority of British businesses, which she said understood the need to respond to the concerns of employees and shareholders.

But she said: "T oo often in recent years, we have also seen another, unacceptable, face of capitalism. A minority of firms are falling short of the high standards we expect of them.

"Some have deliberately broken rules that are designed to protect their workers. Others have ignored the concerns of their shareholders by awarding pay rises to bosses that far outstrip the company's performance."

Mrs May said that problems were caused by a "sm all minority" of executives who " narrowly put their own short-term interests first".

"Our future success as a nation, and the security and prosperity of every family in every part of the UK, depends on our economy thriving in the years ahead," she said.

"That future success is undermined by the excesses and irresponsibility of a few.

"When big businesses are brought into disrepute, public trust in an open, free-enterprise economy is weakened. It is bad for individual workers and companies, but also damages the social fabric of our country. It emboldens those on the far left who hate to see business succeed."

Mrs May said the Government reforms would include measures to ensure workers' voices were "properly heard in the boardroom", but made clear that listed companies would choose for themselves whether to do this by having an employee advisory panel, a dedicated board member or an employee representative on their board.

A new public register will be established by the end of this year, listing companies which have faced shareholder revolts over salaries and bonuses, she said.

The register will enable potential investors to identify firms where existed shareholders do not feel that bosses' rewards are justified.

Mrs May warned that she was ready to take "further steps" if businesses did not respond positively.

Critics will say that the package represents a significant watering down of proposals she previously floated for workers' representation on boards and shareholders' votes on bosses' pay.

But the measures are still likely to face resistance from pro-business Tories.

Backbencher George Freeman, a former minister and head of the PM's policy board , warned on Saturday that Mrs May's government was " 'flirting with anti-capitalism" rather than promoting "real entrepreneurship".