Curb Excessive Pay Or Face Action, Warns Cable
The bosses of Britain's biggest companies have been warned by Vince Cable they must do more to curb excessive pay or face "further action".
In a letter to the FTSE 100 Remuneration Committee chairs, the Business Secretary wrote that "excessive and disproportionate pay in the corporate sector damages popular trust in business".
"Unless business is seen to act responsibly, pressure for further action will inevitably result. I therefore trust that you will seize the opportunity to bring pay in line with performance," he wrote.
"At a time when every part of the economy is striving to get more from less, I hope you find yourselves animated by the same spirit."
Mr Cable's warning comes as the AGM season gets under way - with protests expected at Barclays' annual meeting on Thursday against the bank's multibillion-pound bonus pot.
Last week Barclays announced a new director in charge of setting pay and bonuses in an attempt to defuse a potential shareholder revolt.
"A lot of trust was lost due to extremes of what happened before 2010 when pay accelerated massively, unrelated often to the performance of company," he said in a separate statement.
"There is now an opportunity for companies to make peace with the public.
"This is particularly true in the banking sector where pay reached dangerous levels and with Barclays in particular coming up on Thursday we will see how far they have listened to pressure from the people who own the banks, the shareholders, and exercise responsibility and long term thinking."
Shadow business secretary Chuka Umunna, said: "At a time when shareholders have become more assertive, rather than fighting their corner ministers have acted as road blocks to reform.
"After promising to introduce annual binding shareholder votes on remuneration, Vince Cable and the Tory-led Government caved in and have failed to match their rhetoric with action."