Rules to curb executive pay to be watered down

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

Bosses are likely 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, according to reports yesterday.

Currently, shareholder votes are advisory, which means companies can ignore them. It had been feared a binding annual vote would add to bureaucracy and may make investors less inclined to protest in case they destabilised management teams.

Cable told one newspaper: “The ‘shareholder spring’ has been very effective in holding directors to account.

“But if investors have to do that every year with every company on the stock exchange, they could get tied up in bureaucracy.”

A spokesman for the Department of Business, Innovation & Skills confirmed that a three-year remuneration policy was being considered, but said no decision had been made.