Directors’ Pay

David Simpson Excerpts

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

The hon. Lady is absolutely right—that is what the corporate stewardship code is all about. That initiative goes hand in hand with the others we are taking to ensure that companies operate on a long-term basis. British business has been undermined for far too long by short-term decision making, and we are trying to move it in the opposite direction.

[David Simpson (Upper Bann) (DUP)]

I broadly welcome the Government’s proposals, but on a practical matter, if a company were to default or not implement the legislation, what penalties could the Government impose on them?

[Vince Cable]

There is already a set of rules under the stewardship code. If companies fail to observe the binding vote, they will be making unauthorised payments. Very considerable liabilities can accrue to directors of companies that do that.