This follows months of outrage expressed by shareholders groups over the massive salaries and bonuses paid to company directors even when the companies they run perform badly.
DTI secretary Patricia Hewitt said the new regulations would amend the 1985 Companies Act and bring ‘greater transparency to the process of deciding boardroom pay and linkage to performance’.
Key changes proposed include the requirement that all quoted companies publish a report on directors’ pay as part of their annual reporting cycle and that shareholders vote on the report at each AGM.
Hewitt said: ‘Top-class pay for the best performers is something we support. But there can be little doubt that some company directors have received lavish pay awards in circumstances when they aren’t deserved.
‘We share the view of many shareholders and employees that this is unacceptable and has to change, and it’s important that shareholders should be able to express their views about renumeration packages.’
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