21 June 2012
Govt announces executive pay law reforms
Wide-reaching changes are set to be made to the UK's employment law in term of executive pay, it has emerged.
Business secretary Vince Cable has announced that several changes will be implemented in order to address the perceived failures currently present in the country's corporate governance system.
For instance, under the terms of these alterations, shareholders will be afforded the right to hold binding votes on their company's remuneration policy and its exit payments in order to make sure firms are held accountable for their decisions.
In addition, it is hoped the reforms will improve transparency with regard to wages and bonuses by making sure a clear link between pay and performance is established to avoid any excessive payments.
Mr Cable - who is also MP for Twickenham - commented: "At a time when the global economy remains fragile, it is neither sustainable nor justifiable to see directors' pay rising at 10 per cent a year, while the performance of listed companies lags behind."
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Posted by Trusha Vyas