Cable to tone down pay plan

THE coalition is set to drop a key part of its controversial plans to reform executive pay when it publishes a review tomorrow.

City A.M. understands the Department for Business has cooled on the idea of forcing companies to appoint workers’ representatives to the internal committees which recommend the level of pay for the directors of FTSE-listed companies.

Ministers and officials are believed to have accepted there are major obstacles to the plan, because staff reps are not directors and would not share legal responsibility for the performance of a company, even if they sat on remuneration committees.

Instead Vince Cable, the Business Secretary, is expected to call for greater transparency over pay, including the publication of a single figure for the amount of money received by each director, and greater diversity among the membership of remuneration committees. Cable is also likely to advocate that shareholders be given more power, which could include binding votes on directors’ salaries.