Directors’ Pay

Lord Tugendhat Excerpts

Wednesday 20th June 2012 Lords Chamber

[Baroness Wilcox]

Gosh, that is dreary. Private equity is something else again. We have promoted long-term stewardship and continue to do so today. I would not like to give the impression that the previous Government did nothing at all; they did what they could to try to change things. However, in the past few years, it has become increasingly obvious that the stretch of pay across a company has become too much to bear. From the Statement that I have repeated today, I hope that your Lordships will see that we are keen to monitor how our proposals are being implemented. We leave ourselves the opportunity to keep a watching brief, as is right, but not to interfere in companies’ day-to-day workings or set remuneration. Shareholders are becoming more engaged, as results from recent annual general meetings show. Reforms will encourage shareholders to engage by giving them stronger tools that require companies to sit up and take notice. This will help shareholders sustain the increasing activism that we have already witnessed this year and to which the noble Lord referred.

[Lord Tugendhat]

My Lords, I congratulate the Minister on the robustness of this Statement. I was disappointed when there was nothing in the gracious Speech on this subject but what she has announced today was well worth waiting for. I cannot help feeling that some of the contributions from the party opposite are redolent of foxes being shot. This makes a very important start on what is an important issue and I congratulate the Secretary of State and the Minister in this House on this Statement.

[Baroness Wilcox]

I thank my noble friend very much indeed. I am very glad that somebody thinks we have done the right thing today. I hope we will keep it up and that he will continue to be pleased with us.