PM gets tough on pay of executive ‘fat cats’

THERESA MAY vowed last night to crack down on “fat cat” bosses and prevent them from paying themselves millions of pounds more than they are worth.

The Prime Minister said “the excesses and irresponsibility” of a minority of business leaders was damaging “the social fabric of our country”.

A proposal to “name and shame” companies which have seen a significant level of shareholder revolt over pay will be put forward.

Announcing the policy, government sources praised it as “the world’s first public register of its kind” and played up the impact it could have on controlling excessive pay.

The pledge comes despite concern among senior Tories about the party being perceived as anti-business.

Mrs May announced stronger “binding” votes on executive pay when running for the Tory leadership last year and made a similar pledge in the party’s election manifesto. However, the policy and others designed to tackle boardroom excess provoked heated rows in the Cabinet.

Greg Clark, the Business Secretary, said: “Most companies are proactive and thoughtful when it comes to responsible business practices. But there are a small minority of firms that threaten the reputation of business with their behaviour, including ignoring shareholders’ concerns about executive pay packages.

“This first-ever register will help shareholders to publicly hold these companies to account.”

Listed companies that see 20 per cent of their shareholders object to executive pay packages will be named on the register, to be drawn up by the Investment Association. It will be introduced by the end of the year.

Other proposals in Mrs May’s corporate governance agenda include making large companies publish the pay ratio between high and low earners.