Plan to shame firms will backfire, May is warned

THERESA MAY’S plans to “name and shame” businesses facing shareholder revolts over executive pay are “perverse” and could discourage complaints from being made, a think tank has warned.

The Prime Minister will tomorrow unveil plans for a register of companies where a fifth of shareholders have objected to executive pay packages.

However the Adam Smith Institute, a Thatcherite think tank, warned that shareholders could become more reluctant to mount challenges because they are concerned about damaging the value of the company.

Sam Bowman, executive director, said: “I don’t see what this is supposed to achieve, the unintended consequence could be that shareholders are more reluctant to talk openly about executive pay because they don’t want the value of that company to be reduced.

“It’s very short-sighted, it shows that Theresa May has learned absolutely nothing from the election.

“The big problem is that the Tories have not made any principled case for business for years. It means that there’s no intellectual opposition to Corbynism.”

Mrs May this weekend attacked the “abhorrent” behaviour of companies that ignore the concerns of their shareholders. Ministers will also force FTSE 100 companies to disclose the difference in pay between chief executives and the lowest earners at companies.

But Andrew Bridgen, a Tory MP, said: “The vast majority of entrepreneurs do not overpay themselves for the work they do and the wealth they create. Most underpay themselves and leave the money in the business.

“It’s a mistake to think that these people have nowhere else to go except for the Conservative Party. The danger is that this is demonising all business.”

He added: “I have no objection to these two measures, but it’s the underlying narrative, the inference and sentiment. We are the party of enterprise and business.”

Writing in the Mail on Sunday, Mrs May stressed her support for the majority of British businesses. But she said: “Too often in recent years, we have also seen another, unacceptable, face of capitalism.”