Commenting on Business Secretary Vince Cable’s announcement today regarding binding shareholder votes on executive pay, John Longworth, Director General of the British Chambers of Commerce (BCC) said:“Businesses must have the power to reward good performance, under the governance of non-executive directors and remuneration committees. But poor performance should not be rewarded, and shareholders have a role to play in holding their boards to account.
“Over the years, corporate governance in this area has sometimes failed, prompting the need for action to ensure shareholders’ interests are safeguarded. If binding votes every three years deliver improved levels of shareholder accountability, we have no objections.
“But government intervention should stop there. Setting levels of executive pay is a matter for companies, their boards, and their shareholders, not politicians. At such a crucial time for the UK economy, ministers’ focus should move swiftly on to the core issues – creating jobs and growth. The creation of a business bank for new and growing companies, and a radical increase in infrastructure investment, are far more pressing issues than executive pay.”