London - AFP
The British government launched plans on Monday to give shareholders binding votes over executive pay, in a package of measures aimed at cracking down on excessive boardroom salaries and bonuses. Business Secretary Vince Cable also launched proposals to encourage greater transparency over executive pay deals, and create more diverse boards and remuneration committees, amid ongoing public anger over bosses\' pay. Cable, a key Liberal Democrat member of the Conservative-led coalition government, told lawmakers that there was a \"disconnect\" between boardroom pay and company performance, and described the issue as a \"clear market failure\". \"The evidence is very clear -- that businesses and investors recognise that there is a disconnect between top pay and company performance and that something must be done,\" Cable said in a statement to the House of Commons. \"We cannot continue to see chief executives\' pay rising at 13 percent a year while the performances of companies on the stock exchange languishes way behind. \"We cannot accept top pay rising at five times the rate of average workers pay, as it did last year. \"It\'s not government\'s role to micro-manage company pay, but there are things we can do to address what is a clear market failure.\" The coalition wants companies to produce a distribution statement to allow shareholders to compare executive pay with other dispersals -- such as dividends, business investment, taxation and general staffing costs. And he added: \"Alongside more information, shareholders need new powers to hold the board to account. \"I will consult shortly on specific proposals to reform the current voting arrangements and give shareholders a binding vote, enabling them to exert more pressure on boards. \"This will include a binding vote on future pay policy, including details of how performance will be judged, and real numbers on the potential payouts directors could receive. Companies will have to include a statement on how they have taken into account shareholder views and the results of previous votes.\"