Directors’ Pay

Ian Swales Excerpts

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

I take the hon. Gentleman’s broader point that diversity among directors is critical to changing the culture of companies. At the moment, we are focusing on women on boards of companies, on which significant progress has already been made. That is part of the wider picture of having more diversity, and more employees, among directors.

[Ian Swales (Redcar) (LD)]

A large proportion of the population has a direct or indirect stake in the stock market. Does the Secretary of State believe that there is a link between the relatively poor performance of the stock market over the past 10 years and the increasing share of corporate wealth taken out by directors and senior managers?

[Vince Cable]

It is precisely the divergence between those two things that we are endeavouring to correct. My hon. Friend’s point is certainly true of the banking system, where very large salaries and bonuses have come at the expense of dividends. These reforms should help to correct that.