Shareholders to get power over CEO pay | business | Hindustan Times
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Shareholders to get power over CEO pay

business Updated: Jun 20, 2012 22:47 IST

Britain will legislate to give shareholders the power to reject company director pay deals in a bid to improve the link to performance and calm public anger over soaring executive earnings, business secretary Vince Cable said on Wednesday.

The move puts Britain in the vanguard of a clampdown on corporate pay that has seen investors voicing their disapproval at FTSE 100 boardroom pay levels which have quadrupled over the past decade, far exceeding the performance of share values. The plans will strengthen the hand of shareholders who currently only have an advisory and non-binding vote on directors' remuneration.

The move follows measures to limit the level of banker’s bonuses following the financial crisis and comes as the European Union considers similar proposals to boost shareholder control over director pay.

Pay increases for top executives in the United States have also slowed in response to shareholder pressure, although they still gained by 14% in 2011.