Pay committees 'need shaking up'

The independent research consultancy which advises some of Britain's biggest pension funds on how to vote at company board meetings will today call for a major shake-up of the way remuneration committees are put together.

PIRC believes membership of the committees that set boardroom pay should be widened to allow employees or shareholders to participate in order to make their operations more effective and to facilitate pay restraint.

Alan MacDougall, the managing director of PIRC, said: "Various solutions have been tried over the years to address accelerating executive pay with little success. It is time that we looked properly at the dynamics of remuneration committees."

Broadening membership could improve decision-making, he added.