Theresa May's Corporate Crackdown Faces Growing Opposition

Updated on
  • Business secretary aware companies are worried about Brexit
  • Tension in government growing in lead up to fresh legislation

Prime Minister Theresa May promised to attack executive greed and corporate misbehavior. Now U.K. Business Secretary Greg Clark is trying to water down some of the more radical ideas her advisers and others are putting forward, according to two people familiar with the situation.

Clark enjoys a good working relationship with May and has emerged as the figure trying to temper some policies under consideration, they said. Options include mandatory publication of pay ratios, annual binding votes on company remuneration reports and a ban on the awarding of complex share-based pay schemes to top executives.

According to these people, who declined to be named in order to discuss private deliberations, there is disagreement between some who want tough corporate governance rules and those like Clark who are wary of going after business too hard. One of the people said that Clark is trying to avoid alienating companies that instead want reassurances over Brexit.

With concrete proposals expected in the next six months, Clark is in good standing with May. She will make the final decision as the business community nervously prepare for the annual shareholder meeting season.

What is clear is that May herself wants to be seen to be following through on her promises. In her July speech, she said business had to behave in a way that ordinary people felt was appropriate. Before that, when campaigning for the Conservative Party leadership, May denounced the pay gap between CEOs and workers as "unhealthy.”

“We are committed to creating an economy that works for everyone, and that’s why we consulted on options to strengthen our corporate governance framework,” according to an emailed statement sent by the spokesman for the Department for Business, Energy and Industrial Strategy. “We are considering the response received during the consultation on our proposals and will respond in due course.”

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