Brown urges check on bosses' pay

Executive pay packages should be approved by a vote of all shareholders, Gordon Brown, Labour's shadow Chancellor said yesterday, writes Nicholas Timmins.

He earlier revealed that 77 leading directors and executives of privatised electricity companies have awarded themselves £72m in share options.

Labour is to table an amendment to the Finance Bill this week seeking to require such a vote. Companies which failed to comply would lay themselves open to corporation tax on the pay and share-option deals that they approved.

According to Labour Party research, of the 141 directors of the power companies and generators combined, 77 have share options that in total are valued at £72.6m. Board salaries which ran at a total of just under £3.3m before privatisation now stand at more than£17m.

The attempt to amend the Finance Bill will follow Labour's supply day debate on "divided Britain" highlighting growing inequalities between rich and poor.

Labour aims to exploit public anger at top executive pay as a reflection of that. According to the party, its private polling shows that high executive pay is now producing "massive anger" among all groups of voters. Labour's research shows that directors and executives of Powergen and National Power alone have share options valued at nearly £23m and that 65 directors of the 12 regional electricity companies have options worth a total of £49m.

Mr Brown said that John Major had maintained that what directors received was a matter for shareholders.

"We intend to give every shareholder the opportunity to vote on executive pay packages, where those were not approved by a vote at companies' annual meetings, tax privileges would be lost."