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Companies and investors have given a lukewarm response to a UK government call for them jointly to develop best practice guidelines on executive pay.
The UK’s trade and industry secretary Patricia Hewitt says guidelines would further the progress already made on linking remuneration more closely to performance. The minister wants the Association of British Insurers, the National Association of Pension Funds, and the Confederation of British Industry to agree them this year.
However, the ABI said it was ‘nervous’ about such a venture, which it fears could destabilize an uneasy truce between companies and investors. ‘A great deal has been achieved and we don’t want to unpick all the good work that has been done,’ it said. The CBI did not see the need to do anything more ‘at this time’.
Hewitt made her suggestion in parliament after claiming Deloitte research showed that disclosure measures introduced in 2002 had encouraged shareholders to take more interest. The government has decided not to include provisions on remuneration in its forthcoming company law reform bill.
The UK’s trade and industry secretary Patricia Hewitt says guidelines would further the progress already made on linking remuneration more closely to performance. The minister wants the Association of British Insurers, the National Association of Pension Funds, and the Confederation of British Industry to agree them this year.
However, the ABI said it was ‘nervous’ about such a venture, which it fears could destabilize an uneasy truce between companies and investors. ‘A great deal has been achieved and we don’t want to unpick all the good work that has been done,’ it said. The CBI did not see the need to do anything more ‘at this time’.
Hewitt made her suggestion in parliament after claiming Deloitte research showed that disclosure measures introduced in 2002 had encouraged shareholders to take more interest. The government has decided not to include provisions on remuneration in its forthcoming company law reform bill.
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