In the event, Mr Byers went further than any member of the Blair Cabinet has so far dared in defending sky-high levels of boardroom pay, provided it is matched by equally impressive performance.
He may not yet be the Gordon Gekko of British politics, but Mr Byers came as close as any minister could to echoing that famous refrain "Greed is good".
Mr Byers had no intention of being apologetic in his belief that super- performance merited bumper levels of pay. "In the global economy, we need to pay world class salaries to world class company directors and we should not shy away from saying that publicly," he told his audience of over 100 institutional investors.
Indeed, Mr Byers went further and said the time had come for businessmen who bring home the bacon to be afforded the same treatment as the Michael Owens and Robbie Williams' of this world.
"It is crucial for you as the shareholders that the companies you invest in attract, retain and motivate people of the right calibre and experience to make their businesses successful. We accept such as approach in relation to sports stars and it must be the same for directors."
In opposition, Labour made extraordinary political capital out of an endless series of fat cat pay scandals in the privatised utilities. In government, however, it has recognised that even fat cats can have their redeeming features. A week ago Mr Byers floated the idea of utility regulators being empowered to curb remuneration levels in the energy, telecoms and water industries if pay rises were not merited by performance standards.
Yesterday, he backtracked, however, acknowledging the practical problems of adopting such a policy and insisting that direct control of executive pay by utility regulators was not on the Government's agenda.
Although stories about the latest exorbitant boardroom pay award are two a penny, the detailed surveys of executive remuneration paint a much more restrained picture. The latest analysis by the Monks Partnership of FTSE 100 companies, for instance, shows that while executive rewards are high - pounds 465,000 basic pay for the average chief executive - total earnings in industrial and service companies has risen by only 9.5 per cent this year. For executive directors of financial and property companies, the increase is an even more modest 8.7 per cent.
Nevertheless, big pay awards - and big pay-offs, grab the headlines. Does BOC's Danny Rosenkranz really deserve a pounds 6m pay-off for selling the company to two rival industrial gas groups when the reward for some of his staff will be a P45?
Even that is nothing compared to the executive rewards available on the other side of the Atlantic. Mike Bowlin, the chief executive of the US oil company Atlantic Richfield, will receive a $28m pay-off when BP Amoco completes its takeover of Arco.
Interestingly, the model Mr Byers seems keenest to adopt in deciding what to do, or not to do, about executive remuneration is that of the US.
Pay packages there, often in the form of stock options, put the level of UK awards in the shade. But provided they are merited by performance, they attract nothing like the same level of hysteria or criticism.
Mr Byers has learnt from his predecessors, both Labour and Tory, that executive pay is a minefield and that those who wander into it unprepared rarely emerge unscathed. The last Conservative chancellor, Kenneth Clarke, thought he would garner some easy political points by scrapping tax breaks on share-option schemes the day the Greenbury report on executive pay appeared. But all he succeeded in doing was penalising Asda check-out staff and middle managers on modest salaries.
The Government has therefore opted for the approach of letting shareholders decide. However, it plans to encourage them to be more pro-active in vetoing pay packages which are not justified by performance. A consultative document due out later this month will recommend making it a requirement for companies to put boardroom pay arrangements to an annual vote at shareholders meetings. The Government also wants to give shareholders new rights to table resolutions on remuneration at annual meetings.
The latest evidence suggests that while there is 100 per cent compliance with the requirment to set out remuneration policy, many companies are still falling down badly when it comes to explaining the link between pay and performance.
A review of 270 companies carried out for the Government by PricewaterhouseCoopers showed that in only seven cases were remuneration reports voted on separately at annual meetings. Only 5 per cent of companies disclosed, even in broad terms, how the performance measures on which boardroom pay is calculated relate to long-term company objectives.
It is a measure of how far the Government has shifted its stance on boardroom pay, that there were virtually no dissenting voices in the City yesterday following Mr Byers' speech.
Both the Association of British Insurers and the National Association of Pension Funds (NAPF), whose members account for more than half the pounds 1,600bn invested in UK equities, welcomed Mr Byers' acknowledgement that exceptional performance justified exceptional pay. Ann Robinson, director-general of the NAPF, described the Government's proposals as "a very good example of pragmatism". Mary Francis, director general of the ABI, said: "Institutional investors have a common interest with government in encouraging world class performance.
She also maintained institutional investors were already highly active behind the scenes in influencing, and often changing, company remuneration schemes. "More than 100 companies have put their schemes to us and in every instance changes have been made as a result. In many cases these are minor but in some instances they have been very significant."Reuse content