Coats stays quiet on directors' salaries

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The Independent Online
COATS VIYELLA, Britain's largest textile company, will not disclose up-to-date details of directors' salaries to shareholders at today's annual meeting. Service contracts, which are available for inspection by shareholders before the meeting, contain no details of current earnings. Nor do they detail the basis of earnings-related pay.

Coats is one of several large companies, including Unilever, that have so far failed to comply with the requirements of the Cadbury Report on corporate governance. That report recommends: 'There should be full and clear disclosure of directors' total emoluments.'

A spokesman for Coats said the company disclosed directors' salaries retrospectively in its annual report, adding that this level of disclosure was 'perfectly reasonable'. He said the company was keen to allow its directors some privacy.

According to a Mori survey published yesterday, chief executives and non-executive directors are overwhelmingly in favour of legal sanctions to enforce the Cadbury Committee's recommendations on pay and other issues.

Eighty-seven per cent of chief executives and 91 per cent of non-executive directors believe company law should be changed to require listed companies to disclose the salary and performance-related pay of the chairman and highest paid directors, and the criteria on which performance-related pay is calculated, says the report. The study was commissioned by the recruitment consultants Executive Interim Management and Egon Zehnder International.

More than 80 per cent both of chief executives and of non-executives supported a statutory requirement to establish a special committee composed wholly or mainly of non-executive directors to recommend the pay of executive directors.

In addition, three-quarters approved changing the law to oblige listed companies to set up audit committees. These would only have non-executive directors as full-time members and would be responsible for recommending and liaising with auditors.

However, much smaller proportions claimed their companies already adopted such practices.