26/06/2002

New regulations to crack down on "fat cat" pay

New regulations have been announced by Trade Secretary Patricia Hewitt designed to crack down on "fat cat" pay deals in the private sector.

Under the plans shareholders will have the right to vote annually on the level of directors' salaries, and companies will have to publish details of how salaries relate to performance.

Trade Secretary Patricia Hewitt said the regulations would mean that all quoted companies would have to justify how salaries are linked to performance.

However, the four-year delay in implementing the proposals is expected to raise eyebrows among unions and other activists.

Since the current proposals were first published in October 2001, several surveys have shown that boardroom pay has risen much faster than that of ordinary workers, spurred on by the increasing use of share options.

The TUC have welcomed the move saying it would bring some more transparency to the way directors' pay is set.

(MB)


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