Companies: Executive Remuneration

Lord Taverne Excerpts

Wednesday 9th February 2011 Lords Chamber

[Baroness Wilcox]

I suppose what the noble Lord is really asking about is directors’ pay and fairness. That is where we all are now. I think we would all agree that there must be a robust link between the pay of those who run companies and the performance of those companies; that rewards for failure are not acceptable; and that exceptional rewards for mediocre performance are not in anybody’s best interest. I can assure noble Lords that this Government are very interested in making sure that companies are run well and that there is fairness in distribution on the payment for everybody in a company.

[Lord Taverne]

My Lords, in the previous Parliament, the noble Lord, Lord Gavron, introduced a Bill, widely supported on all sides of the House, that provided for publication in the annual report of public companies of the ratio that the noble Lord, Lord Donoughue, talked about. Would it not be a very simple matter for the Government to introduce that Bill? It would be a very effective way of naming and shaming.

[Baroness Wilcox]

My Lords, before I came to your Lordships' House today to answer this Question, I rather thought that this question was going to come from the noble Lord, Lord Donoughue, who commented greatly on the Bill introduced by the noble Lord, Lord Gavron, when it was debated in 2009. The question on that Bill, which will fit with the questions I have been asked now, was: should the AGM meeting vote on the directors’ remuneration report be binding instead of advisory?