IoD rejects legislation on fat cat pay
The Institute of Directors has come out against proposals by trade and industry secretary Patricia Hewitt to introduce legislation to curb huge payouts to failed company directors.
While acknowledging that there was a problem with ‘rewards for failure’, the IoD said legislating on the matter was ‘inappropriate’, particularly the limiting of directors’ contracts to one year, the IoS reported yesterday.
It warned that plans to phase compensation payments to sacked directors could lead to higher base salaries for directors as well as result in disputes over pay.
Rather the IoD believes the issue should be solved through ‘transparency of reporting and shareholder involvement’.