Pay deals to go to shareholder vote

Under the plans, expected to be revealed by the government today, companies will be obliged to put directors’ remuneration packages to shareholder vote under measures intended to curb excessive pay.

The votes would only be advisory, but ministers believe companies would be foolish to ignore an adverse result.

The scheme comes at a time when directors’ pay is once again under the spotlight, highlighted by the squabbling at Marconi over payout deals given to its ousted directors such as former FD John Mayo.

However, under the proposals to be put forward by Patricia Hewitt, the trade secretary, the annual vote will be on a report on all driectors’ pay rather than individual packages.

The move has been welcomed by investor groups who have long campaigned on the issue of excessive pay deals.

David Gould, investment director at the National Association of Pension Funds, described the plans as ‘very good news for shareholders’.


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