Directors’ Pay

Greg Mulholland Excerpts

Wednesday 20th June 2012 Commons Chamber

[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.

[Greg Mulholland (Leeds North West) (LD)]

I welcome the statement, and the Secretary of State is right to tackle rewards for failure. Surely the worst example is that of Enterprise Inns, which suffered a 96.6% decline in share values over five years. Over three years when share values declined by 80%, Ted Tuppen, the chief executive, thought it fit to reward himself with £850,000 in performance-related bonuses. Does my right hon. Friend agree that shareholders are only part of the answer? Thousands of businesses are being damaged by the pubco model, so will he pledge to uphold the will of Parliament and announce a review in the autumn? As everyone in the industry knows, the imbalance in that sector has not been changed by the so-called self-regulatory solution.

[Vince Cable]

The Minister who formerly had responsibility for pubs, who is now Secretary of State for Energy and Climate Change, had extensive debates with my hon. Friend on Enterprise Inns and the damage that the pubco model has done. The figures my hon. Friend produces are striking. I cannot understand why shareholders are not more active if there has been such a divergence between pay and performance. Perhaps he, with his formidable campaigning skills, will help them to be so.