U.K. Business Secretary Vince Cable will warn companies that he’ll consider forcing them to consult staff on senior executives’ pay if directors and shareholders don’t limit it themselves.
In a speech to heads of remuneration committees at a dinner in London tonight, Cable will accuse some of them of responding to rules he’s already introduced by “observing the letter of the law but ignoring the spirit.”
Since October, public companies in the U.K. have had to give shareholders binding votes on executive-pay structures every three years, as well as publishing full, clear details.
“If companies and investors are unable or unwilling to act responsibly, the pressure for stronger measures will be hard to ignore,” Cable will say, according to his office. “Under such circumstances, I would consider options including stricter regulatory oversight of pay reports and policies, a requirement on shareholders to disclose how they have voted on pay, or a requirement to consult employees on pay.”
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