Directors’ Pay

David Mowat Excerpts

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

I am frequently accused of socialist tendencies by colleagues behind me, but the promotion of shareholders is a rather strange definition of socialism. There is not a shred of evidence to suggest that this will promote the outward movement of companies. Indeed, all the leading business associations and investor groups have welcomed what we are doing.

[David Mowat (Warrington South) (Con)]

In many quoted companies, highly paid employees actually earn more than directors. Will the Secretary of State consider extending at least the transparency aspect of this legislation to employees, as well as directors?

[Vince Cable]

I have identified that problem. It is particularly a problem in banks, where the so-called code staff, including traders, are sometimes paid more than their directors. That will be covered by the regulation on financial services, which is being strengthened in that respect. There are probably very few public listed companies outside the banking sector where the phenomenon the hon. Gentleman describes is real.