Top companies warned over pay
23/04/2014
Business Secretary Vince Cable has written to all FTSE 100 companies, warning them to keep up pressure on executive pay bonuses in order to alleviate public anger.
He singled out the banking industry in particular as being “ridiculous”, with Barclays one of the main offenders for allocating around £2.5bn in bonus payments earlier this year, despite posting a dip in profits.
The letter which warns top companies over their executive pay is one of a series of corporate reforms recently announced by the Business Secretary. One other reform included the announcement of a public register intended on cracking down on “rogue directors” as companies will now have to list their true owners.
Public trust lost
Mr Cable was quoted as saying that the public have lost a lot of trust in top business executives because of their inflated bonuses. He said "A lot of trust has been lost, because of the extremes of what happened in 2010, when pay escalated massively unrelated to the performance of companies."
However, Mr Cable did say that there is now an opportunity for these businesses to win back the trust of the public by saying “This is an opportunity for these companies to make peace with the public.”
He continued "It's particularly true of the banking sector where pay reached ridiculous and dangerous levels, and with Barclays in particular coming up on Thursday, we will see how far they have listened to people who own the banks - the shareholders - and exercise responsibility in long term thinking."
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