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Tuesday, February 16, 1999 Published at 07:36 GMT


Business: The Company File

'Fatcat' pay may be curbed

Boardroom pay packages again in the spotlight

Speculation is mounting the UK Government is about to introduce measures to limit pay rises to company directors.

Department of Trade and Industry Secretary Stephen Byers is said to have decided to act on what unions have termed "fatcat" boardroom remuneration by forcing changes to allow shareholders to vote on directors' pay packages.


[ image: Stephen Byers: War on fatcats?]
Stephen Byers: War on fatcats?
Mr Byers has asked the London Stock Exchange to look at new listing rules for companies to strengthen shareholder rights, according to the Financial Times newspaper. This is the government's preferred method of change rather than amendments to companies law, it says.

The changes would also introduce annual shareholder votes on whether each director should remain in office.

City support

The government is said to have the support of some major fund managers in the City of London, who by virtue of their large holdings of stock, are among the biggest shareholders in UK companies.

The controversy over directors' and executives' remuneration bubbled over last year after the announcement of a string of seven-figure pay packages in recent years.

This prompted an outcry from union leaders and calls for official intervention to prevent boards from awarding themselves increases much higher than rises in average wages.

Last week, Barclays Bank drew criticism over the deal offered to its new chief executive Michael O'Neill who stands to make £2m in his first year.

However, the government has been keen to show it is pro-business and in a separate move, Mr Byers has announced it will not force employers to keep special records to show that they are observing the new minimum wage and has dropped plans for minimum wage details to accompany every pay slip.



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