In an interview, the Prime Minister said that “big rewards” for corporate failure “make people’s blood boil”.
The Government is now preparing to introduce new rules which will force companies to provide detailed information on their executive’s pay. Shareholders will then have the legal right to veto excessive pay packages.
Workers may also be given positions on company remuneration committees which agree executive pay packages.
Mr Cameron also said that the Government was considering capping executive pay at a certain multiple of a companies’ average salary – although he said there were problems with such a draconian approach.
In an interview with the BBC’s Andrew Marr show, the Prime Minister said: “What I think is wrong is pay going up and up and up when it is not commensurate with the success companies are having.
“I'm in favour of people setting up great businesses in Britain, expanding those businesses in Britain, making lots of money when those businesses succeed in Britain.
“Government should not tell people what they are to be paid but where you have got a market failure – and to me this is a market failure – we saw between 1998 and 2010 the average pay of FTSE executives go up four times.
“Some people are worth £2 million because they have added masses of jobs, masses of investment, masses of growth.
“But where there was excessive growth of payment, unrelated to success, frankly ripping off the shareholder and the customer, and is crony capitalism and is wrong. It's also, and this is the key point, payments for failure.
“Big rewards when people fail make, I think, people's blood boil.”
In another interview, Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said that there was a “mood for change” and that executive pay restraint was “something you can do something about.”
He added it was about “constraining the actions of a wealthy elite.”
The Prime Minister said that is was “likely” legislation to regulate high pay would be unveiled in the Queen's Speech in the spring.
Mr Cameron said: “We have a Queen's Speech coming up in the spring this year. I don't want to pre-empt it but it is very likely to include legislation on companies and on banking and things like that, so there is room to make legislative changes if that is necessary.”
He insisted that "everything was on the table" although stressed that the centrepiece of the scheme would be more transparency in the system.
Mr Cameron said: "The absolute key, and I can confirm this today, that does need to happen and will happen is clear transparency in terms of the publication in terms of proper pay numbers to really see what people are being paid and then binding shareholder votes so the owners of the company vote on the pay levels and – absolutely key – votes on parts about dismissal packages and payments for failure."
The Prime Minister said he wanted to avoid "tokenism" and added: "I think the key thing here is reforming the remuneration committees themselves. What's happened in the past, with a lot of chairmen sitting on each other's remuneration committees, there has been a bit of back scratching going on and a bit of circular process of rewards being pushed up across the board.
"Rewards sometimes that are earned because they are related to success but in too many cases rewards just generally going up."
Mr Cameron was speaking after he outlined his vision for a "fairer" Britain created through fundamental changes to the economy in an interview published in the Sunday Telegraph.
The Prime Minister said he would use 2012 to convince people that he had a “vision at the end of this, of a fairer, better economy, a fairer, better society, where if you work hard and do the right thing you get rewarded”.
Mr Cameron has apologised for describing Ed Balls’s behaviour in the Commons as like "someone with Tourette’s" in the same interview.
"He just annoys me," Mr Cameron said of Mr Balls — whose gestures and comments aimed at the Prime Minister have become a well-known feature at question time sessions.
"But I’m very bad, in the House of Commons, at not getting distracted, and the endless, ceaseless banter, it’s like having someone with Tourette’s permanently sitting opposite you."
Last night, Downing Street put out an apology saying the remark was made "off the cuff". A spokesman said: "The Prime Minister would not have meant to offend anyone. He apologises if any offence has been caused."
“Government should not tell people what they are to be paid but where you have got a market failure – and to me this is a market failure – we saw between 1998 and 2010 the average pay of FTSE executives go up four times.
“Some people are worth £2 million because they have added masses of jobs, masses of investment, masses of growth.
“But where there was excessive growth of payment, unrelated to success, frankly ripping off the shareholder and the customer, and is crony capitalism and is wrong. It's also, and this is the key point, payments for failure.
“Big rewards when people fail make, I think, people's blood boil.”
In another interview, Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said that there was a “mood for change” and that executive pay restraint was “something you can do something about.”
He added it was about “constraining the actions of a wealthy elite.”
The Prime Minister said that is was “likely” legislation to regulate high pay would be unveiled in the Queen's Speech in the spring.
Mr Cameron said: “We have a Queen's Speech coming up in the spring this year. I don't want to pre-empt it but it is very likely to include legislation on companies and on banking and things like that, so there is room to make legislative changes if that is necessary.”
He insisted that "everything was on the table" although stressed that the centrepiece of the scheme would be more transparency in the system.
Mr Cameron said: "The absolute key, and I can confirm this today, that does need to happen and will happen is clear transparency in terms of the publication in terms of proper pay numbers to really see what people are being paid and then binding shareholder votes so the owners of the company vote on the pay levels and – absolutely key – votes on parts about dismissal packages and payments for failure."
The Prime Minister said he wanted to avoid "tokenism" and added: "I think the key thing here is reforming the remuneration committees themselves. What's happened in the past, with a lot of chairmen sitting on each other's remuneration committees, there has been a bit of back scratching going on and a bit of circular process of rewards being pushed up across the board.
"Rewards sometimes that are earned because they are related to success but in too many cases rewards just generally going up."
Mr Cameron was speaking after he outlined his vision for a "fairer" Britain created through fundamental changes to the economy in an interview published in the Sunday Telegraph.
The Prime Minister said he would use 2012 to convince people that he had a “vision at the end of this, of a fairer, better economy, a fairer, better society, where if you work hard and do the right thing you get rewarded”.
Mr Cameron has apologised for describing Ed Balls’s behaviour in the Commons as like "someone with Tourette’s" in the same interview.
"He just annoys me," Mr Cameron said of Mr Balls — whose gestures and comments aimed at the Prime Minister have become a well-known feature at question time sessions.
"But I’m very bad, in the House of Commons, at not getting distracted, and the endless, ceaseless banter, it’s like having someone with Tourette’s permanently sitting opposite you."
Last night, Downing Street put out an apology saying the remark was made "off the cuff". A spokesman said: "The Prime Minister would not have meant to offend anyone. He apologises if any offence has been caused."
Original Article
Source: Telegraph
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