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| Version 5 | Version 6 |
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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 3 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. |
| Some groups had called for binding votes to take place annually. | Some groups had called for binding votes to take place annually. |
| Under the new plans, firms will also have to publish a simple figure every year showing how much executives have been paid. | Under the new plans, firms 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 resign. | And they will have to say how much an executive will be paid if they are sacked or resign. |
| Currently, while shareholders get to vote on executive pay packages every year, their votes are not binding so in theory the board can 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 can ignore the vote. |
| Shadow business secretary Chuka Umunna criticised the plans for falling short of demands for an annual vote. | |
| "This claim, that having an annual vote on remuneration policy by shareholders would amount to micro-management, is a really quite absurd proposition in my view," he told the BBC. | |
| 'Right direction' | |
| Gavin Oldham, chief executive of retail stockbroker The Share Centre, said there would be some disappointment that votes would be every three years, rather than annually. | Gavin Oldham, chief executive of retail stockbroker The Share Centre, said there would be some disappointment that votes would be every three years, rather than annually. |
| "They've probably gone for the three-year cycle so that it is more forward-looking rather than retrospective," he told the BBC's Today programme. | "They've probably gone for the three-year cycle so that it is more forward-looking rather than retrospective," he told the BBC's Today programme. |
| "Because to set up retrospective issues between executive directors and boards as a result of a shareholder vote would just lead to legal battles and nobody wants that." | "Because to set up retrospective issues between executive directors and boards as a result of a shareholder vote would just lead to legal battles and nobody wants that." |
| But he added that it was a step in the right direction. | But he added that it was a step in the right direction. |
| "Institutional shareholders are now realising what personal investors have actually understood for a long time - that executive pay matters and they need to take more attention of the general conditions of the economy and how their employees are getting on." | "Institutional shareholders are now realising what personal investors have actually understood for a long time - that executive pay matters and they need to take more attention of the general conditions of the economy and how their employees are getting on." |
| BBC business editor Robert Peston said executive pay rises may also be tempered by the new simplicity and clarity Mr Cable hopes to bring to the question of how much bosses actually pocket every year | BBC business editor Robert Peston said executive pay rises may also be tempered by the new simplicity and clarity Mr Cable hopes to bring to the question of how much bosses actually pocket every year |
| "Right now it is very difficult to see the total amount that any executive takes home because the remuneration sections of annual reports are immensely long, complex and woolly, especially in regard to earnings from large and important long-term incentive plans," he said. | "Right now it is very difficult to see the total amount that any executive takes home because the remuneration sections of annual reports are immensely long, complex and woolly, especially in regard to earnings from large and important long-term incentive plans," he said. |
| Last week, shareholders in the advertising group 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 group 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. |
| What do you think of these plans? Send us your comments using the form below | What do you think of these plans? Send us your comments using the form below |