DTI consults on fat cat pay row
Trade and industry secretary Patricia Hewitt launched Rewards for Failure today aimed at examining whether further measures are needed to ensure that executive pay reflects performance when contracts are terminated.
Link: Major investor groups join in fat cat row
The document comes in response to the growing disquiet amongst shareholders over massive, in some cases obscene, amounts of money paid to company directors after the company’s share price has tumbled and the business is saddled with massive debts and other problems.
In one recent case shareholders succeeded in getting pharmaceutical giant GlaxoSmithKline to back down over a plan to pay chief executive Jean Pierre Garnier £22m if he left the job early.
Hewitt said: ‘Britain has some of the best and most successful businesses in the world. But the good reputation of the majority is being tarnished bythe bad practice of the minority.
‘We have no problems with big rewards for big success but shareholders are rightly concerned when directors leave failing companies and walk away with excessive payouts.’
The consultation ends on 30 September and the document can be viewed at www.dti.gov.uk