1. ITV Report

Government crackdown on excessive boardroom rewards

The crackdown comes after a series of recent shareholder revolts Photo: Press Association

The Business Secretary will unveil details today of a crackdown on excessive boardroom pay.

Vince Cable will publish plans to make remuneration more transparent and to hold boards more accountable for pay packages handed out to senior executives.

The Business Secretary, Vince Cable Credit: Reuters

It follows the cases of firms like WPP whose shareholders voted against a huge pay increase for Chief Executive Martin Sorrell, but were ignored.

However, it is reported Vince Cable may have trouble pushing through the more contentious reforms.

  • He is said to be watering down aims to introduce a binding vote on pay, by requiring an investor poll every three years rather than annually, unless a company changes a director's deal
  • He will have to consult further on one of the key aims in the clampdown - to force companies to reveal a single figure for each director's remuneration

Recently government sources told our Business Editor Laura Kuenssberg that any new rules would not bind firms like WPP by law. They are one of a group of companies who are listed on the FTSE 100 but incorporated somewhere else.

Martin Sorrell, Chief Executive Officer of WPP Credit: Reuters

At the moment they choose to follow the UK standards and conventions and have advisory votes. But the government does not believe they could be compelled to have legally binding votes, whether every year or every 3 years, when the law changes.

Last week, WPP shareholders voted against the company's executive pay report by a majority of 59.5%.

AVIVA sign outside the company's head office in the City of London Credit: Reuters

Last month, shareholders in the insurance company Aviva voted down its remuneration report.

Branch of Barclays bank in Bristol Credit: Press Association

And before that, Barclays, one of the most powerful institutions in the world also faced a revolt from its shareholders.

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