Oral Answers to Questions

Debate between Kelly Tolhurst and Steve Baker

Tuesday 22nd October 2019 Commons Chamber

[Kelly Tolhurst]

I thank the right hon. Gentleman for his question. As I mentioned, CEO pay has fallen. There were reforms at the beginning of the year, to ensure that shareholders’ voices are heard more in the boardroom. There is a binding vote every three years on remuneration policy, and there is now an advisory vote every year. If it is not successful, pay has to be put before the next AGM. As he will know, the Investment Association now keeps a record, at the Government’s request, to ensure that we are tracking pay where there is shareholder dissent.

[Mr Steve Baker (Wycombe) (Con)]

Does my hon. Friend agree that the right way to control executive pay is to increase democratic control of capital, not by increasing the powers of the state but by dramatically improving the rights of shareholders?

[Kelly Tolhurst]

My hon. Friend is right, and that is what the Government’s reforms have done. As I outlined, shareholders have a vote every three years and an advisory vote every year. Through the reforms, we have also enabled employee directors, non-exec directors or employee councils to have representation on the board. Companies now have to explain their wider pay policy and how it affects the whole company.