Directors’ Pay

Mark Field Excerpts

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

That is a perfectly correct statement of the balance we are trying to strike. We want investors and shareholders to be actively involved. In order to be so, they need to know what is going on and to have other information. I fully acknowledge that indirectly that has some regulatory impact. We have tried to strike the correct balance, and I believe we have done so.

[Mark Field (Cities of London and Westminster) (Con)]

The Secretary of State is right to identify the deep public distaste not just for rewards for failure but for general rewards for those who are not in any meaningful way risk-takers or entrepreneurs. How will he judge whether the policy has been a success over the next three years? When we are sitting here in June 2015, on what basis will he see today as a success?

[Vince Cable]

The hon. Gentleman is right to stress that we are talking not just about reward for failure but about the general escalation of the pay of top executives unrelated to company performance. It is not likely that we could produce a simple metric of how the policy will work through, but if annual or tri-annual reviews of policy are successfully implemented across companies, with well informed shareholders exercising their votes, I think that in a few years’ time we will see a good deal of restraint and more strategic thinking in the setting of pay policies. That is what we are trying to achieve.