Directors’ Pay

Adrian Bailey Excerpts

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

As the hon. Gentleman knows in his important role as Chairman of the Treasury Committee, a separate set of regulations introduced by the Financial Services Authority deals with the link between the types of pay package that are introduced and systemic risk. Excessive bonusing has undoubtedly had an effect in the past, and as a result of the experience of the financial crash, those regulations have been tightened. Banks, as public limited companies, will be governed by the new regulations, and I imagine that after their experiences shareholders in our leading banks will want to ensure that forward-looking pay policies take proper account of the systemic risk of their institutions.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I broadly welcome the Minister’s statement and I welcome his agreement to appear before the Select Committee on Business, Innovation and Skills on 28 June to be further questioned on it. May I probe him on his comments about the disclosure levels of institutional investors? Currently, only 15% of asset management companies reveal their voting behaviour at shareholder annual general meetings. In the light of his statement, will he consider introducing legislation to ensure that that becomes 100%?

[Vince Cable]

I have already indicated in my statement that we are examining disclosure levels. There is an encouraging trend towards disclosure, and as the hon. Gentleman knows, the big weight of votes comes through the big pension and insurance companies. I have said that we will consider further measures if the current ones do not lead to the right trajectory, and his point is a useful one.