DTI Proposals on Boardroom Pay

The DTI has this morning issued a consultation document containing proposals on boardroom pay and on limiting 'golden farewells' for directors.

The Press Release indicates that the consultation document contains the following proposals:

1. limiting notice or contract periods to one year (or less) unless there are exceptional reasons for a longer period;
2. strengthening disclosure provisions on service contracts by requiring companies to provide a clear explanation to shareholders of any compensation agreements agreed by the board following the departure of a director;
3. requiring quoted companies to ask shareholders to vote on its remuneration report every year, or enabling shareholders to move a resolution on remuneration at the AGM.

Stephen Byers, Secretary of State for Trade and Industry, said "Most people recognise the need to pay a 'golden hello' to attract the best but don't understand the need to pay a golden farewell for failure."

Replies to the consultation document should be received by 29th October 1999. According to the press release, the consultation document is available at http://www.dti.gov.uk/cld (but it was not there when I looked!)