British Prime Minister David Cameron has championed the rights of investors to veto executive pay, saying that it’s wrong for salaries of the top echelons “to keep going up and up and up”, even when they fail to deliver results. Instead, Cameron calls for greater empowerment of shareholders, especially when it comes to voting rights on top pay packages.
Speaking to The Sunday Telegraph, British Prime Minister vowed to give shareholders the right to veto executives’ pay packages, in the wake of rising public discord and animosity towards the ‘fat cat’ pay.
Cameron said he was determined to end the “merry-go-round” practice of super-rich bosses “sitting on each other’s boards, patting each other’s backs, and handing out each other’s pay rises.”
Related: Bankers in London Need Mental Help
Related Story: Why Inequality Will Only Lead To Our Downfall: Nouriel Roubini
In a move that would surely please the Occupy Movement, Cameron said:
Let’s empower the shareholders by having a straight, shareholder vote on top pay packages. The market for top people isn’t working; it needs to be sorted out.
No details have been announced on how the Government plans to implement this, but news reports indicate that it could be part of reforms being worked on by British business secretary Vince Cable, who is due to publish his findings soon.
Related Story: Sorry “99%”, There Are No Quick Fixes For Inequality: Raghuram Rajan
On the part of Cameron and his Conservative party, the move is widely seen as a direct assault on businesses, particularly over the way the 2008/09 financial crisis was handled when top bankers ushered out with huge payouts.
Referring to what he called “crony capitalism” and “big rewards” for corporate failure “make people’s blood boil”, Cameron said:
Some people are worth £2 million because they have added masses of jobs, masses of investment, masses of growth. But excessive growth of payment, unrelated to success, frankly ripping off the shareholder and the customer ... is crony capitalism and is wrong
Related: Bank Bonuses: UK Leads Regulatory Charge, Bankers Meow in Agreement
Related: Moody's Slams Insane Bank Bonuses