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The Government has launched plans to expose over-inflated directors’ bonuses by forcing companies to disclose them in their annual reports.
The measures announced by Trade and Industry Secretary Stephen Byers are likely to become law later this year if Labour win the expected general election.
Nick Page, adviser on reward and employment conditions at the CIPD, said, “These measures are in the directors’ interest. It will put the onus on employers to be more transparent about their pay structures.”
“Organisations shouldn’t be ashamed or embarrassed about revealing financial information. Employers do have to justify their salaries to directors.”
The proposals on directors’ remuneration were published by the DTI after Government concerns over fat-cat salaries and directors receiving bonuses, even when their companies fail to meet performance targets.
Under the plans, employers will have to publish a remuneration report within their annual report.
It will include a performance share graph that will allow shareholders to see the link between performance of the company and directors’ pay.
Bruce Warman, Vauxhall’s HR director said, “I believe that employers have nothing to fear from these measures.”
