'Get out' clause likely for exec pay
The government is not in favour of statutory measures allowing company boards to overrule on executive pay-offs, preferring instead, a more flexible, lighter-touch approach.
The idea of introducing legislation into the code of corporate governance on this issue has apparently been rejected by the Department of Trade & Industry, according to the FT.
It follows pressure from investor groups over what they consider excessive pay to executives who run companies poorly.
Rather the government is said to be in favour of changes to the voluntary code on corporate governance and the use of a ‘get out’ clause in contracts.
The government is also in favour of investors using their voting on pay issues more effectively, which they believe will make introducing legislation unnecessary.