Plaid calls for tougher regulations on executive pay

Plaid Cymru Treasury spokesperson, Jonathan Edwards MP, called for Vince Cable to introduce tougher regulations on executive pay than those proposed by the UK Government, including a maximum wage and company employees on remuneration committees which decide chief executive wage packages.

The UK Con-Dem government are planning on allowing shareholders to hold a binding vote on chief executive pay rather than the advisory votes which are currently held, and on determining three year pay structures to allow forward planning.

However, while welcoming the changes as a step in the right direction, Mr Edwards believes that these proposals do not go far enough.

Mr Edwards said:

“Executive pay has spiralled out of control in recent years based on the short-termist outlook of shareholders and remuneration committees who are in a race to the top, knowing that their own pay will depend on the earnings of those in similar jobs.

“As I said while challenging Vince Cable on these proposals last week, strengthening safeguards against this will ensure a greater buy-in from employees.

“However these proposals do not go far enough in preventing the repeat of the obscene pay rises that chief executives and senior board members have received.

“Only last week, a report was published showing that the bosses of FTSE 100 companies enjoyed an average 12% rise in their take-home pay last year. This serves as a reminder of who’s really ‘in it together’ while the majority of the population are dealing with soaring food and fuel prices.

“Alongside executive and non-executive board members there should also be employees on the remuneration committee who are able to see the situation from the factory or office floor.

“We would also like to see a maximum wage introduced to ensure that the relationship between company success and earnings packages is shared throughout the company.

“Whatever happens with these proposals, this government’s position on high pay was made clear when it announced a huge tax cut for high earners in this year’s Budget – one of the few issues on which they have not yet u-turned.”
ENDS

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