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| Cable to force three-yearly binding votes on executive pay | Cable to force three-yearly binding votes on executive pay |
| (about 6 hours later) | |
| Business secretary Vince Cable will announce plans on Wednesday to force companies to have binding votes on executive pay every three years. | Business secretary Vince Cable will announce plans on Wednesday to force companies to have binding votes on executive pay every three years. |
| Companies will then have to stick to their pay plans for the next three years or have another shareholder vote. | Companies will then have to stick to their pay plans for the next three years or have another shareholder vote. |
| They will also have to publish a simple figure every year showing how much executives have been paid. | They will also have to publish a simple figure every year showing how much executives have been paid. |
| And they will have to say how much an executive will be paid if they are sacked or quit. | And they will have to say how much an executive will be paid if they are sacked or quit. |
| BBC business editor Robert Peston said: "Now, some may accuse Mr Cable of letting companies off the hook by not insisting on an annual, binding vote." | BBC business editor Robert Peston said: "Now, some may accuse Mr Cable of letting companies off the hook by not insisting on an annual, binding vote." |
| "However, he would argue that the three-yearly votes should reduce the pace of rises in executive pay, in that the current system of setting pay every year has in practice ratcheted up boardroom rewards far faster than pay has risen in the rest of the economy." | "However, he would argue that the three-yearly votes should reduce the pace of rises in executive pay, in that the current system of setting pay every year has in practice ratcheted up boardroom rewards far faster than pay has risen in the rest of the economy." |
| Currently, while shareholders get to vote on executive pay packages every year, their votes are not binding so in theory the board could ignore the vote. | Currently, while shareholders get to vote on executive pay packages every year, their votes are not binding so in theory the board could ignore the vote. |
| Last week, shareholders in the advertising company WPP voted against the company's executive pay report, which included a £6.8m deal for chief executive Sir Martin Sorrell, by a majority of 59.5%. | Last week, shareholders in the advertising company WPP voted against the company's executive pay report, which included a £6.8m deal for chief executive Sir Martin Sorrell, by a majority of 59.5%. |
| Last month, shareholders in the insurance company Aviva voted down its remuneration report. | Last month, shareholders in the insurance company Aviva voted down its remuneration report. |
| Some observers said that there was a shareholder spring taking place, with shareholders becoming more active. | Some observers said that there was a shareholder spring taking place, with shareholders becoming more active. |
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