Business Secretary Vince Cable is proposing a clampdown on executive pay through a range of measures including a shareholder veto and the ability to claw back parts of executive pay packages.
The Liberal Democrats are publishing a discussion paper today which will look at ways to rein in excessive executive pay.
Ahead of his keynote speech at the Liberal Democrat conference in Birmingham today, Cable (pictured) told the BBC this morning: “Executive pay has increased by over 400 per cent over the last decade at a time when share prices haven’t increased at all and basic pay of most employees hasn’t increased at all.
“There is a real problem here and what we’re looking at in this proposed discussion paper is different ways in which shareholders can have a more effective voice.”
The proposals include a bigger voice for shareholders to allow them to veto remuneration packages of senior management, and a requirement for companies to set out how levels of pay are determined.
Sky News has also reported that the discussion paper will include a proposal to claw back parts of executive pay packages, echoing similar legislation in the US that requires directors to forfeit long-term incentives that have been awarded on the basis of inaccurate or incomplete information.
Cable is also keen to see the Independent Commission on Banking proposals, which call for UK retail banking arms to be ringfenced, to be implemented through the financial services bill ahead of the 2019 deadline.