No binding vote on pay by shareholders

Published on 11/06/2012 00:00

Business Secretary Vince Cable is set to climb down on radical plans to give shareholders more power to curb excessive executive pay.

Bosses are expected to be spared an annual binding vote on their pay, which had been a flagship idea in a paper on tackling boardroom greed, in favour of a poll every three years.

The expected climbdown comes despite numerous rebellions over remuneration reports in recent weeks, in a move dubbed “the shareholder spring”.

Currently, shareholder votes are advisory, which means companies can ignore them. But they have still proved effective at exerting pressure on companies.

It had been feared that a binding annual vote would make investors less inclined to protest in case they destabilised management teams..