Investors will have greater clarity on how top businesses are run and how executive pay is matched to performance under proposals published today by Business Secretary Vince Cable.
Proposals published as part of a consultation paper will simplify the reporting requirements for companies, providing clear and relevant information to investors on performance and pay. It will increase transparency and accountability in the investment chain and enable shareholders to get a real picture of what is happening to inform their investment decisions and help our economy grow.
Measures to improve reporting on remuneration include requiring companies to provide information on the link between the performance of companies and top executives earnings. For example, requiring disclosure where the remuneration committee has agreed to pay bonuses when performance targets have not been met.
It also asks:
* whether to require the total figure for each board director’s remuneration to be published, including basic salary, bonuses, share schemes and pensions and how this should be calculated;
* whether the ratio between the CEO’s pay and median earnings in a company should be published; and
* in line with proposals for large banks, whether to disclose the highest earners in a company below board level, for example those earning above a defined threshold of total pay, or a defined number of top earners who have significant influence over how a company is run or those who have the ability to take significant risk.