Concerns raised over wage levels

Investors should be given a bigger say in executive pay in the UK’s biggest companies under moves to rebuild trust in business.

The Institute of Directors said that if 30% of investors oppose a remuneration report at an annual meeting, the next government should mandate that firms must review their pay policy and allow shareholders a fresh vote.

The IoD noted that despite some high profile rebellions in recent months, executive pay is usually waved through at an AGM.

“UK company boards have been put under unprecedented scrutiny in recent months, with the government and the House of Commons business committee suggesting reforms to executive pay and the governance of private companies,” said Oliver Parry, IoD head of corporate governance.

“UK corporate governance is highly regarded across the world, but there is still a pressing need to rebuild public trust in big business to work in the long-term interests of investors and employees, rather than the short-term interests of managers.

“Now is the time for sensible reforms which increase transparency and draw more engagement from shareholders.”

TUC general secretary Frances O’Grady said British workers needed a hike in their pay packets.

Research by the group found real wages, taking into account inflation, were on course to fall by 0.5% in this country by the end of next year while other OECD countries saw a 2.6% lift.

“Britain badly needs a pay rise, and all the political parties must explain in their manifestos how they will boost living standards across the country,” she said.

TUC general secretary Frances O’Grady said British workers needed a pay rise.