Partner Article

New plans to curb executive pay proposed

Vince Cable has announced plans to give shareholders more control over executive pay, the BBC reports.

Under new criteria to be set out by the Business Secretary this afternoon, firms will have to establish criteria for executive pay to prevent payouts for failure.

He will also outline a series of other proposals aimed to stop multi million pound packages, and will suggest putting employee representatives on remuneration committees.

Mr Cable now hopes that these strict constraints will help to encourage the growth needed to rejuvenate the economy.

A three month consultation has already taken place into changes in reporting requirements for companies listed on the stock exchange, the results of which are due to come into place in October 2012.

The new system will bring together all the details of each executive board member’s salary, pension, bonuses and shareholdings, which are all currently listed in different parts of the report.

An explanation of the package will also be required, as well as projections of what executives could expect the following year.

Reports show that the median annual remuneration for FTSE100 chief executives has been shown to rise from £1 million in 1998 to £4.2 million in 2010.

This was posted in Bdaily's Members' News section by Ruth Mitchell .