Executive Pay - Cable & Tireless

Anyone who has listened to Vince Cable recently will know that he is on a tireless crusade to reduce executive pay. There have been two developments in this area:

1. BIS has published a discussion paper on the governance of executive remuneration in quoted companies.
2. Revised Principles of Remuneration have been published by ABI suggesting that appropriate reward should be supported for exceptional performance, but that payment for failure should be strongly resisted and that excessive or undeserved remuneration undermines the efficient operation of the company, adversely affects its reputation and is not aligned with shareholder interests.

It remains to be seen whether there will be some attempted regulation in this area or, more likely, further encouragement for shareholders to challenge executive pay.

Also on pay, the FSA has issued a new "Dear CEO" letter in relation to the FSA Remuneration Code, which is primarily aimed at Tier 2, 3 and 4 firms. http://www.fsa.gov.uk/pubs/guidance/fg11_16_remuneration_t234.pdf