Executive Pay

Business secretary Vince Cable is set to climb down on his bid to slash excessive executive pay.

His softened stance looks set to let chief executives off the hook and spare them the rigours of an annual binding vote on their pay and bonuses, a move he put forward.

The Twickenham MP now plans to allow a vote every three years, to fend off concerns that it would have tied companies up in yet more bureaucracy.

It comes in the wake of a series of shareholder rebellions over and boardroom greed, most recently at insurance giant, Aviva. And in a groundswell of increased investor ire, shareholders at WPP are set to go to war at its AGM over Martin Sorrell’s eye-watering new pay deal on Wednesday.

Labour dubbed the move “greatly disappointing”.

In May, Aviva chief executive Andrew Moss announced his resignation, following a rejection of the insurance group’s remuneration report at a rowdy AGM.

Moss, chief executive since 2007, offered to waive a 5% pay increase, which would have pushed his salary beyond £1m, but this failed to garner him any support from shareholders.

His departure is the latest dramatic event amid the ‘shareholder spring’ as investors have turned on boards indicating their dissatisfaction with excessive executive remuneration packages, despite poor or declining performances of the companies own shares.

In the last fortnight, Astra Zeneca chief executive David Brennan resigned and Sly Bailey of Trinity Mirror also stepped down following concern and discontent among company owners over executive remuneration.

Aviva said it will consider internal and external candidates for the CEO role and expects this to take several months.