March 14 (Bloomberg) -- U.K. Business Secretary Vince Cable backed allowing shareholders a greater say over executive pay, including annual votes on compensation and binding votes on exit payments.
Cable said he will seek views on the plan before the lawmakers vote on the proposals, which were announced in January. Today’s announcement also includes plans to get an annual “advisory” vote on pay in the previous year and increasing the number of votes needed to approve pay.
“These measures will create a more robust framework within which executive pay is set, agreed and reported on,” Cable said in a written statement to Parliament today.
In January, Cable said the government will seek to give shareholders a binding vote on the amount paid to executives when they leave a company. The largest public companies should publish clear details of how much their highest-paid executives get, along with information about average salaries within the companies.
The High Pay Commission, an independent group that pushes for curbs on top earners, found British directors’ salaries increased by 64 percent over the past decade, while the average year-end share price of FTSE 100 companies fell 71 percent. The average annual bonus for directors rose 187 percent, according to the panel.
In the U.S., the Dodd-Frank Act has given shareholders a non-binding vote on top executive pay since January 2011. In August, compensation experts said companies whose policies got a vote below about 80 percent were taking it as a sign of shareholder discontent.
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