Vince Cable, the Business Secretary, announced last week that proposals in March 2012 to give shareholders more say on executive director pay in listed companies are to be watered down.
At that time, the proposals were thought to be “virtually certain to take effect” after 1 October 2013, and would have a significant impact on executive director remuneration.
But key points on “these [now less] radical proposals” are:
- A binding annual vote on future remuneration policy will now be every three years
- Increasing the threshold of support required to approve future remuneration policy was originally to be as high as 75%, but now a simple majority
- Advisory annual vote on how remuneration policy has been implemented will be retained
- Originally there would be a binding vote on termination packages – now no requirement at the time of departure to obtain specific shareholder approval of payments to directors in excess of one times salary
The Government has bowed to pressure from companies, who want to be able to do what they like. Yet even during the consultation period, attitudes have shifted, with once-timid shareholders now wanting greater controls.
I bet you won’t find this controversy over the Enterprise and Regulatory Reform Bill debated in many places where the general public might end up forming an opinion!