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Review of executive pay a step in the right direction, says AER

Review of executive pay a step in the right direction, says AER

Today’s announcement by Vince Cable on the Government’s plans on executive pay has been welcomed as a step in the right direction by the REC’s Association of Executive Recruiters.

The announcement comes ahead of tomorrow's formal publication of the review between executive pay and transparency. The review is a result of a Government commitment to look at ways to curb what some have called excessive pay packages before company boards prepare to vote on the annual compensation of their senior executives.

Commenting, David Winterburn, Chair of the Association of Executive Recruiters said:

“After much speculation that the Government would force companies to appoint workers to committees which recommend the pay level for directors of FTSE companies, it is clear that there has been a re-think  with a focus on greatly increasing transparency over pay  instead.

“Such a move is a step in the right direction. The very top end of the executive labour market is highly competitive and it is essential that boards and chairmen retain the ability to attract the best talent available to these critical roles.  Large firms need the best possible leaders, and measures which could put off suitable individuals considering such roles would not be beneficial to companies or their workers.

He concluded: “At a time when we need the best people leading our largest businesses if the country is to get out of the current economic situation, I’m pleased that the government is intent on strengthening the link between company performance and executive pay through increased transparency. High pay for failure is never acceptable and this is what understandably upsets many people.”

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