Companies: Executive Remuneration

Lord Dubs Excerpts

Wednesday 9th November 2011 Lords Chamber

Asked By

[Lord Dubs]

To ask Her Majesty’s Government what action they propose to take to address the disparity between senior executive remuneration and that of the rest of the working population.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government believe that executive remuneration which is well structured and rewards long-term success is an important way of promoting sustainability and growth. However, there are justified concerns about the disconnect between how our largest listed companies perform and the rewards that are on offer, particularly at a time of economic restraint. We feel that that is unsustainable. That is why the Government have published a discussion paper that explores these issues and invites views on what can be done.

[Lord Dubs]

My Lords, does the Minister accept that our top executive pay has gone up by nearly 50 per cent while that of the rest of the population has gone up on average by 2.5 per cent, and that this is deeply offensive to many people who feel that the bankers and others who caused the crisis are now exploiting us? Does the big society not require consent? In the absence of consent, there is a threat to our social cohesion.

[Baroness Wilcox]

Concern over this is coming not just from Government but from investors, business groups and captains of industry, who have all told us that this is a problem that needs to be addressed. Business should be a force for good but, understandably, figures showing soaring executive pay are causing resentment towards large companies. We want to see transparency, proper accountability to shareholders and a sense of responsibility from British boardrooms.