Binding votes must be on real numbers not vague pay notions, says TUC

date: 20 June 2012

embargo: For immediate release

Proposals outlined today (Wednesday) by Business Secretary Vince Cable that will introduce binding shareholder votes could begin to curb executive pay levels, but much will depend on the detail of what investors are actually voting upon, said the TUC.

TUC General Secretary Brendan Barber said: 'Shareholders have shown increasing unease recently at the mammoth pay and bonus packages enjoyed by those at the top despite, in many cases, poor company performance.

'Binding annual votes - or even binding votes every third year if the company chooses that option - where shareholders get to vote on real numbers on pay and actual remuneration packages could mean a new era of more sensible pay setting for those at the top.

'But if all shareholders are being asked to do is vote on a vague notion of a company's pay policy little will change and directors' pay will continue to rise at rates ordinary workers can only dream about.

'Giving employees a voice in discussions about pay at the top of their organisations is the one reform that would see an immediate reining in of corporate pay excess. Employees who have seen their pay held down or frozen as austerity bites would inject a similar dose of economic reality to the pay of those in the boardroom.

'Those with the most to lose from executive pay reform have already persuaded ministers against the 75 per cent approval rating for pay packages - a move which would've given these proposals real bite. Ministers must not allow the business lobby to water down any more government moves to curb executive excess.'

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