New Bill may outlaw fat cat pay-offs

A Bill to be introduced before the House of Commons this week will seek to outlaw large payments made to executives of poorly performing companies.

Written by Larry Schlesinger

Accountancy Age, 10 Dec 2002

Link: Fat cat executives get fatter

It will be introduced for debate by Tory MP Archie Norman and has been given a boost after Trade & Industry secretary Patricia Hewitt, yesterday, agreed to look at proposals to amend the Companies Act.

According to the Times Hewitt believes executives being rewarded for failure is unacceptable and she is open to any ideas that will stop this.

The news will be a major boost to the growing anti-fat cat lobby, which has campaigned hard against such payments.

In June this year Vodafone chief executive Sir Christopher Gent caused particurlar outrage when he received £1.5m in share awards and stock options despite hefty losses at the company.

The biggest payoff to date has been that given to Klaus Esser, former head of German telecoms group Mannesmann, who received over £9.1m - just before the company was taken over by Vodaphone. Sir Peter Bonfield, of BT, received a payoff worth £820,000.