Tories call for end to golden handshakes
MPs from the Conservative Party are tabling a private members' Bill which proposes that company boards be given the power to reduce lucrative payments to sacked directors.
The Bill is headed up by Archie Norman, MP, the former chairman and chief executive of Asda.
With the backing of the Tory leadership, the proposal would allow companies to override contractual obligations made to directors if they underperform, who are then sacked.
This proposed Bill will add to the growing lobby – including shareholder groups and business bodies – who have called for an end to fat cat pay-offs, particurlary where a company performs badly.
The Department of Trade & Industry is reported to be in favour of the measures incorporated in the Bill, but would prefer a self-regulatory approach using corporate governance codes.