Companies: Executive Remuneration

Lord Renton of Mount Harry Excerpts

Wednesday 9th February 2011 Lords Chamber

[Baroness Wilcox]

My Lords, I am aware of the growing differential over the past 10 years in the pay of chief executives, executives and employees. The noble Lord will expect me to comment on the fact that this occurred in the decade of the previous regime and we inherited it. We are now looking very carefully at how we can get fairness into this. Excessive differentials are not helpful. At a time of challenging economic conditions, it is important that the focus is on linking rewards to growth.

[Lord Renton of Mount Harry]

My Lords, I find myself very much in line with the noble Lord, Lord Donoughue, on this. Does my noble friend agree that the prime interest in this matter lies with the shareholders of the FTSE companies? Is it therefore not reasonable and sensible to require in law that quoted companies compare the total remuneration of their chief executive with the average wage of their workers, and do that in their annual report which everyone can read?

[Baroness Wilcox]

My Lords, we are in the middle of discussions about these very subjects. They are areas that have been under review for quite some time. Some people ask that shareholders should have separate votes, and some people ask the Government to intervene in all sorts of ways. There are ongoing discussions, particularly about the role of remuneration committees. I emphasise that it is for shareholders to go to shareholders’ meetings and say what they think.