By Ron Coates, 3 June 2003 15:45
NEWS UK trade secretary Patricia Hewitt today launched her department's attack on the 'fat cat' culture of big business. The DTI consultation document is surprisingly mild, considering the series of trailers and briefings of the last few weeks by the secretary and her department. The words 'insulting' and 'last-chance saloon' were extensively bandied about. Dire action seemed imminent. But the 'fat cat' paper starts by stating: "It is for shareholders, not government, to decide whether executive pay is set at appropriate levels and whether it adequately reflects performance." And in her introduction, Hewitt writes that: "We have no problems with big rewards for big success." And she adds that in time, increased shareholder activism and transparency of the total remuneration of company bosses will ensure that the current culture of reward for failure will disappear. In the mean time, the department has put out a number of suggestions to speed this process up, including: limiting the periods of directors' contracts; staggering pay-outs and cutting them off if directors find new jobs and tightening performance-related pay criteria. Most of them could be endorsed by the CBI, and probably will be. Response to the DTI's proposals 'Rewards for Failure Directors Remuneration Contracts, Performance and Severance' are invited before 30 September.
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