British PM says executive pay to be put to shareholder vote

Monday, January 9, 2012

British shareholders will be able to veto executive pay packages according to statements yesterday by British Prime Minister David Cameron.

Mr Cameron said he wanted to allow shareholders to make a "straight shareholder vote on executive pay packages". Shareholders can only submit a non-binding advisory vote on executive remunerations under current law. The move comes amid growing political pressure and public criticism over excessive pay for chief executives even when a business has failed.

Details of such a scheme may be revealed with an anticipated package of reforms under the portfolio of Business Secretary Vince Cable.

Ed Miliband, leader of the opposition, said the public would not accept the government's policy. "Does anyone really believe that David Cameron came into politics to create more responsible capitalism?" he asked rhetorically.

The Labour Party has also called for measures to monitor and reel in exorbitant executive salaries. On Saturday, shadow business secretary Chuka Umunna said a "better capitalism" needs greater transparency. Mr Umanna said this could take the form of publishing pay ratios of chief executives compared to their employees.

The Liberal Democrats have pledged support for reeling in executive pay.