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.”
