UK to give shareholders power over executive pay

Source: Reuters

(Reuters) - Britain will legislate to give shareholders the power to reject company director pay deals in a bid to improve the link to performance and calm public anger over soaring executive earnings, Business Secretary Vince Cable said on Wednesday.

The move puts Britain in the vanguard of a clampdown on corporate pay that has seen investors voicing their disapproval at FTSE 100 boardroom pay levels which have quadrupled over the past decade, far exceeding the performance of share values.

The plans will strengthen the hand of shareholders who currently only have an advisory and non-binding vote on directors' remuneration.

"At a time when the global economy remains fragile, it is neither sustainable nor justifiable to see directors' pay rising at 10 percent a year, while the performance of listed companies lags behind and many employees are having their pay cut or frozen," Cable said.

Read more: http://uk.reuters.com/article/2012/06/20/uk-britain-pay-idUKBRE85J0JZ20120620