CBI responds to Government proposals on executive pay
The CBI today responded to the Secretary of State for Business’ statement to the House of Commons on executive pay.
John Cridland, CBI Director-General, said:
“We have been clear that executive pay must always be fair and transparent, and that high pay must be for outstanding, not mediocre, performance. Millions for mediocrity does a disservice to the reputations of hard working businesses.
“Introducing a single remuneration figure is a positive step forward and will help achieve greater transparency.
“The proposal that binding votes for shareholders will not be retrospective is welcome, but such a change does not make for good corporate governance as investors will be second-guessing and ‘man marking’ directors.
“The CBI strongly supports measures to reduce, withhold, or in exceptional circumstances claw back executive pay as it sends a powerful message to future executives. And it is right that remuneration committees should take into account the organisation’s broader pay strategy when setting executive pay.
“Not including employees on boards makes sense. Every good company involves its staff in how the business is doing, but boards must be the representatives of business owners.
“It is encouraging that some of the heat has been taken out of this issue by government coming up with some practical proposals.”