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IoD recommends more disclosure on top pay

The basis of the Institute of Directors' new top pay policy was spelled out by Tim Melville-Ross, its director-general, ahead of the publication next week of full guidelines.

He said the IoD would recommend greater disclosure of directors' pay and that where appropriate shareholders should also take action.

Speaking yesterday in London the day after the IoD's policy and executive committee approved the proposals, Mr Melville-Ross said they would be based on principles of good practice rather than on detailed prescription.

The proposals could come under fire from top businessmen because they are expected to recommend the publication of full details of each director's pay, well beyond the present legal minimum.

Some senior businessmen have expressed private reservations about going too far on disclosure of earnings and have begun to lobby the Confederation of British Industry's new executive pay review group, announced on Monday. The IoD is a member of the group.

The IoD is likely to suggest that companies should ideally publish details of all aspects of directors' remuneration that could lead to public concern, including the length of rolling and fixed contracts.

But the IoD is certain to come down against any new legislation to govern directors' pay and it is also against one key aspect of the guidelines published last month by the investment committee of the National Association of Pension Funds.

The NAPF believes all non-executive directors should be put up for re-election every year.

The IoD has been working on its own proposals for nearly a year.