THE FINANCIAL Reporting Council is weighing up a change to the rules governing boardroom pay, which could see executives banned from sitting on remuneration panels at other companies.
The watchdog’s consultation was launched a day after new laws came into effect giving investors the right to a binding vote on executive pay.
The FRC will also look at rules on clawback arrangements, used to retrieve bonuses from executives when companies fail to hit long-term targets, as well as options for firms that experience investor rebellions.
“The government’s new legislation underlines the importance of boards and investors engaging on directors’ remuneration,” said FRC chairman Baroness Hogg.
But Jo Iwasaki, head of corporate governance at the ICAEW, said that “[w]hile executive remuneration has been high in the public’s awareness, it is not clear that there is appetite for further changes to the existing [rules]”.