The paper states that the “business secretary champions ‘responsible capitalism’ model, forcing companies to justify pay policies in their annual reports.”
However, the devil is in the detail.
The Guardian further reports that pay increases and bonuses will have to be justified to shareholders. Now I’m no expert in company law, but surely the requirement for the CEO and other executive officers to justify their actions to the board and key shareholders already exists?
If not, then Vince Cable’s announcement is welcome. Although, I fear it will lack the teeth to really bite.
Wouldn’t it be better to legislate that remuneration at the top can be no more than say 25 times that of the lower paid, as per John Lewis?
Thus, to pay extortionate salaries to executives a company must significantly improve the lot of all its workers. Now that really would narrow the pay gap and create a more equal society.
Sadly, there are too many vested interests in maintaining the status quo. So whilst Vince may talk tough, his Tory bedfellows will prevent him from getting tough!