Business Secretary Vince Cable has moved to quash speculation he plans to give shareholders a binding vote on executive pay once every three years instead of annually as originally proposed.
In March, the Department for Business Innovation and Skills published a consultation aimed at giving shareholders an annual binding vote on executive pay and golden goodbyes worth more than a year’s salary. It also suggested increasing the level of support required beyond a simple majority of over 50 per cent.
At the weekend it was reported Cable was inclined to scrap the proposal from plans set to be published in the coming weeks, giving shareholders a binding vote every three years instead.
The reform will be introduced in a Government amendment to the Enterprise and Regulatory Reform Bill.
In a Commons debate on the bill yesterday, Cable said: “Current thinking, we are yet to report back to the House formally on the consultation, is there will be annual votes if pay policy is changed by companies. The investor community made it absolutely clear that it sees that as a much more productive way of progressing its concerns.”
Shadow Business Secretary Chuka Umunna welcomed Cable’s comments adding that Labour backs proposals put forward by Fidelity Worldwide Investment calling for a majority of 75 per cent to be required for binding annual votes on future pay policy.
In May, Aviva Andrew Moss stood down after 54 per cent of shareholders voted against his remuneration package.