I will be happy to support changes to company law to give shareholders the full power they need to fix or approve remuneration of directors and senior personnel in companies. I trust it will also give them the power to say “No” to large pay offs to executives leaving because their performance has disappointed. Executives on high pay should be fully answerable to shareholders. There are bad examples in poorly performing companies where pay and pay offs are too high, compounding the difficutlies of the enterprise concerned. Shareholders are the obvious group to provide some leadership and discipline, as it is their money the executives are using. There is nothing wrong with high rewards where the company is doing very well. Complaining about that is just the same old politics of jealousy that gets in the way of a successful enterprise economy.
I also hope the government will look again at what it is doing where it is the shareholder or owner. The best way of showing the private sector the leadership it expects from them would be to come up with sensible remuneration packages and plans for RBS where the government is the shareholder on behalf of taxpayers. I will not begrudge senior people at RBS high bonuses if and when their businesses are back in the private sector, trading profitably, and the taxpayer has got a sensible amount of their money back. In the meantime, making losses or little profit and still dependent on the huge sums the taxpayer has put in, it is difficult to explain why people running this business are paid so much. Sorting out RBS is essential for the greater wellbeing of the economy. It is also the main test of the goverment’s new approach to remuneration.