Legislation to curb excessive boardroom pay rises is expected to be recommended by the Confederation of British Industry's inquiry under Sir Richard Greenbury, according to business leaders travelling with John Major, the Prime Minister, on the high-powered trade delegation to Israel.
Sir Richard's committee is likely to require more disclosures by companies of the payments to boardroom executives, and the addition of non-executive members to the remuneration committees that determine pay for executives. The remuneration committees may also be required to have regard to the competitive performance of companies before agreeing to big boardroom pay rises.
The changes, which could come in amendments to the Companies Act, would be directed at all public companies, but the performance criteria, raised in the Commons by Mr Major, could inhibit privatised utilities from making big awards on the basis of profits from their monopoly position.
Sources said the business community was extremely irritated with the impression that all top company executives were "fat cats" because of the excesses of the utility bosses.
The Government has also been alarmed that public opinion has swung against the Thatcherite principle of rewarding success with high salaries in favour of a more egalitarian share of pay rises between bosses and workers.
Conservative Party leaders believe it would be very dangerous for the Government if that trend was not reversed.Reuse content