Outlook: Cable's pay plan is all about his own political windfall

For Vince Cable, the issue of executive pay must feel like a golden ticket. Having made his name in opposition with some vituperative attacks on bankers, he has found the world a little more nuanced since making the move into Government – and his reputation has suffered accordingly. What better way to put that right than with some high-profile attacks on fat-cat pay packets for failing executives?

The question is, what will Mr Cable's proposals achieve? And the disappointing answer for those of us who believe that executive pay inflation has consistently had little or no link to executive performance (never mind the remuneration offered to the workforce as a whole) is: not a lot.

It is not so much that there is anything wrong with Mr Cable's ideas – just that it is difficult to see how they would lead to the sort of culture change of which he talks. Take, for example, his suggestion that shareholder votes on directors' pay ought to be binding rather than advisory – and possibly that remuneration ought to be approved in advance. Well, that's fine in theory. But how many of the advisory votes that have taken place at Britain's top 500 companies over the past year would have vetoed remuneration proposals had they been binding? The answer is two. In fact, the average vote against company remuneration reports last year was just 5.6 per cent.

As for making the disclosure requirements on executive pay more demanding, it has to be said that the remuneration reports now filed in every company's annual report do provide far more detail than in the past. By all means make companies say more, particularly on how pay relates to performance, but don't expect many shareholders to be shocked by the "revelations".

Mr Cable's suggestions amount, in other words, to a pretty timid attack on what he has in recent weeks described as "outrageous" levels of executive pay. We shall see how they develop during the consultation, but would it be too much to hope that the final regulation goes at least as far as the strictures that have already been imposed on the financial services industry? For example, forcing companies to defer part of pay through share awards that can be clawed back if necessary seems appropriate for all boards, and not just the banks.

In the end, though, if the Business Secretary thinks he can leave it to shareholders to curb the growing income inequality between executives and the rest, he is likely to be disappointed.

Sooner or later, he will have to accept or reject the case for caps on pay ratios, for example, as well as other legislation likely to set him against his Coalition colleagues. Golden tickets can very quickly become hot potatoes.