LONDON — Britain’s government is looking to introduce laws that grant company shareholders the power to veto executive pay packages, Prime Minister David Cameron said Sunday, in a bid to address public anger at many bosses’ lavish salaries and bonuses.
Cameron blamed what he called the “merry-go-round” in which a small group of boardroom directors approve each other’s excessive packages to the detriment of their own companies.
He said he was aware that most people are furious that some top executives have received huge remuneration, despite their firms not improving their performances.
“Big rewards when people fail make people’s blood boil,” Cameron told the BBC in an interview.
He added that laws to regulate high pay in banks are likely to be proposed in the next few months. There were no details on how the new arrangements would work, but they could form part of a reform package being prepared by Business Secretary Vince Cable. Currently, company shareholders can only show their disapproval through an advisory vote.
The leaders of all three major parties in Britain have attacked the excessive bonuses in recent days, amid continuing public discontent over the issue as the nation’s fragile economy struggles to cope with rising unemployment, weak domestic growth and the debt crisis in continental Europe. The Bank of England has forecast little or no growth over the next few quarters.
Taxpayers rescued the Royal Bank of Scotland and Lloyds Banking Group during the credit crisis and continue to hold significant stakes in both banks, which has made the seven- and eight-figure bonuses pocketed by some bankers a sensitive political issue.
Last year, Cameron said it was “unacceptable” that RBS was setting aside more than half a billion pounds ($785 million) for bonuses.