The about face comes despite a spate of rebellions over business chiefs’ remuneration – dubbed the shareholder spring. Under revised plans the vote is likely to be held every three years instead.
“The Prime Minister said he wanted to empower shareholders, but has failed to stand up to vested interests and match these words with action,” said Umunna.
“This latest u-turn, with the government drastically watering down its flagship proposal on improving corporate governance... only adds to the sense of chaos and shambles at the heart of government.”
Despite the successes of the shareholder spring in reining in pay, many have voiced fears that yearly binding votes would make investors less likely to protest in case they destabilised management teams and added to bureaucracy.