There was a lot of talk about the changes that Simon Power made in the regulatory environment for business in New Zealand. His changes lacked any real gonads. David Cameron on the other hand is taking the bull by the horns and proposing dramatic companies regulation changes particularly over executive remuneration:
“Let’s empower the shareholders by having a straight, shareholder vote on top pay packages. We’ve got to deal with the merry-go-round where there’s too many cases of remuneration committee members, sitting on each other’s boards, patting each other’s backs, and handing out each other’s pay rises. We need to get to grips with that.”
Measures will include, The Sunday Telegraph has learnt, moves to give shareholders an effective veto both on high pay-and-perks packages for executives, and on the huge payouts business leaders get when they leave jobs in which they have failed badly.
Shareholders’ votes on packages when senior directors, including chief executives, join companies and when they leave are set to be made binding, rather than simply advisory, which they are at present. While plans are currently at an early stage, Vince Cable, the Business Secretary, will shortly announce a consultation on the best way of achieving this.
Mr Cameron is certain that action is needed. “The mood has changed.
“I’ve been struck that you now get the criticism of pay at the top, and of bank bonuses, from a business audience.
“There is a very strong sense that small businessmen and women working hard, grafting away, building a business and not paying themselves huge amount of money, are furious with these rewards at the top for people who aren’t taking the sort of risks they’re having to take.”