Firms back Theresa May’s attack on runaway executive pay
Business leaders have given a resounding endorsement of Theresa May’s proposals to shake up corporate governance and put pressure on runaway levels of executive pay.
In a new poll by FTI Consulting, seen exclusively by Morning Wire, 81 per cent of senior figures from small, medium and large companies backed a tougher government stance on how the UK’s largest companies are run.
Theresa May pledged last week to put big businesses under the microscope as prime minister, announcing her intention to introduce completely binding shareholder votes on executive pay and force companies to publish their pay ratios — the difference between the salary of the average worker and the top earner.
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In further departure from previous Conservative policy, she also signalled support for employee representation on boards and stricter controls over foreign takeovers of UK firms.
The widespread support of business leaders for some degree of heavier intervention comes after another AGM season of notable shareholder rebellions over top executive pay packets.
“It may seem surprising that businesses support more government intervention in the way they structure themselves and reward top performers,” Dan Healy, managing director and head of research at FTI Consulting said.
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“But clearly concern at high – and for some, arguably unjustified – levels of executive pay runs deep across different sections of the public and business community.”
The survey of more than 500 business leaders also showed fierce division on what route the government should take to forge a new relationship with Europe, with a tiny majority of 51 per cent calling on the UK to trigger Article 50 as soon as possible.