PracticeConsultingPay shake-up delayed

Pay shake-up delayed

DTI officials this week expressed 'dismay' over trade secretary Stephen Byers' decision to delay without explanation a long-awaited shake-up of UK boardroom pay policy.

Business leaders and government departments expected Byers to make an announcement last week on proposals put forward in a consultation paper drawn up last year on director remuneration.

Last Friday parliament adjourned for its summer recess, which delays until at least October the plans to give shareholders’ rights to vote on directors pay at agms. A DTI source said: ‘We expected an announcement and were dismayed that nothing has been said.’

Byers last July pledged to bring directors pay in line with performance, supported by the National Association of Pension Funds.

Shareholder concern over executive pay packages has mounted over the last few weeks with company annual general meetings becoming the focus for discontent.

This week Smithkline Beecham shareholders voted by 30% and Glaxo Wellcome by 29% to oppose proposed executive pay for the two pharmaceutical giants merger, which will award FD-elect John Coombe 220,000 share options.

Coombe is also chairman of the influential 100 Group of Finance Directors.

‘We acknowledge there is a difference of views and the majority of shareholders voted in favour,’ a Glaxo spokesman said.

This week the Accountancy Age Big Question found almost three out of four FDs agree that shareholders should each year vote on boardroom salaries.

Judging the level of rewards

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