London - Arabstoday
Shareholders should have a bigger say on executive pay to ensure there are \"no rewards for failure\", Business Secretary Vince Cable has said. Ahead of his keynote speech to the Lib Dem conference, Mr Cable told the BBC there was a \"real problem\" with pay rising while share prices flatlined. He said he did not want \"state control of pay\", but was \"well-disposed\" to shareholders having a veto. \"People accept capitalism but they want responsible capitalism,\" he will say. He is also expected to float a series of other proposals aimed at reining in multi-million pound packages, including requiring companies to set out the criteria used to determine pay and perks. Other proposals include putting employee representatives on remuneration committees. BBC political correspondent Carole Walker said Mr Cable will say Mr Cable\'s big regret this year is not securing tighter controls on bank pay and bonuses, allowing the message to go out that unrestrained greed is acceptable. \"It\'s a message that will go down well with his conference here, but Mr Cable will also acknowledge that the big question now is how to get growth to turn the economy around,\" she said. \'Exercising discipline\' The business secretary told the BBC: \"Executive pay has increased by over 400% over the last decade at a time when share prices haven\'t increased at all and basic pay of most employees hasn\'t increased at all. \"There is a real problem here and what we\'re looking at in this proposed discussion paper is different ways in which shareholders can have a more effective voice.\" Asked whether he wanted executive pay to go down, he said \"not necessarily\" if businesses were successful: \"What I want to see is rewards for success not rewards for failure. \"We don\'t want to go down the direction of state control of pay, that\'s completely wrong. What we do want to see is shareholders being more active in exercising discipline over the companies they own.\" He said he was in favour of shareholders being able to block pay awards they felt were unreasonable, but discussions were needed with the business community before any such move was implemented. Mr Cable\'s Department for Business, Innovation and Skills will publish a discussion paper on the proposals October. Pay criteria Changes to the reporting requirements for all stock exchange-quoted companies are due to come into force in October 2012, following a three-month consultation. At present, the details of each executive board member\'s salary, pension, bonuses, and shareholdings are recorded but in separate parts of the annual report. Under the new system they will be brought together in one table - with a total figure given to shareholders for the first time. An explanation of how the package was arrived at will also have to be included, as well as projections of the minimum and maximum each executive could expect the next year. Aides said the median total remuneration for FTSE100 chief executives had risen from £1m a year in 1998 to £4.2m a year in 2010.