Fund managers split over executive pay crackdown

Fund managers are divided over whether introducing legislation to curb executive pay could lead to a drain of talented employees away from UK firms.

The Government is preparing new legislation aimed at addressing excessive pay which is likely to include introducing binding shareholder votes on executive pay packages.

Artemis UK special situations manager Derek Stuart says: “The market of the FTSE 350 companies is a global marketplace. If you restrict that in any way, it is to the detriment of UK companies. If the legislation is quite specific on levels of pay in the UK, then you may find some of the talent will go overseas.”

Liontrust UK special situations manager Julian Fosh (pictured) is also concerned that senior positions with UK firms could become less attractive.

He says: “Directors moving abroad is a legitimate concern. These people are at the top of their game in an international marketplace and so pay is a factor they will consider. It is possible that the legislation will operate to damage UK-based companies.”

However, Eden Financial UK equity fund manager Leigh Himsworth says: “People always threaten to leave but it is a big lifestyle decision to move abroad and there are many good people out there in the UK market.”