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'Changes need to be made' to reduce executive pay

16 March 2012

"Changes need to be made" to reduce executive pay Posted by Editorial team

Two organisations have called for changes in the way earnings are decided for top personnel, but they do not agree on the solution to the issue.

Simon Walker, director-general of the Institute of Directors, agreed with a proposal made by the Department for Business that shareholders should have a binding vote on executive pay.

However, general secretary for the Trades Union Congress Brendan Barber said this move does not go far enough and representatives of the workers should also sit on remuneration committees.

What both organisations appeared to be in accordance on was that people at the top of the payroll are taking home excessive amounts of money.

"People are understandably angry that while ordinary families struggle to make ends meet ... pay and bonus payouts to senior executives seem to have been completely unaffected by the economic crisis," Mr Barber stated.

Mr Walker argued that allowing shareholders more power is an "appropriate" response, but added a majority vote must be enough for that action to be carried forward by the board and no other conditions should need to be in place.

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