Written question asked by Lord Wedderburn of Charlton (Labour), in the House of Lords. It was answered by Lord Sainsbury of Turville (Labour) on Thursday, 30 June 2005.

Directors' Remunerations

Question: Whether they intend to take further measures to moderate the rise in the rewards of executive directors of large companies, in the light of projections foreshadowing a rising rate of interest over the next year exceeding the projected rate of increase in wages generally.

Answer: Directors' remuneration is primarily a matter for companies and their shareholders. In 2002, the Government introduced the Directors Remuneration Report Regulations aimed at improving disclosure and accountability to shareholders. Independent research conducted last year by Deloitte Touche found that the regulations have been effective, and provided for enhanced shareholder engagement. The research suggested that further improvements to disclosure and the linkage between pay and performance are best pursued through the development of best practice guidelines. It is for shareholders to satisfy themselves that remuneration arrangements for directors are in the best interests of the company and the Government has no current plans to take further measures.

Secondary information