Whilst on board a train from the North West headed back to London, Prime Minister David Cameron gave a candid interview which was reported in the Telegraph. During the course of speaking with members of the press, Mr. Cameron discussed his intentions to deal with excessive executive remuneration in 2012.
The Prime Minister feels that current methods of compensating board members isn’t ‘working out’ and that shareholders need the power to veto excessive pay which these members award each other by patting each other on the back. As well, he wants to deal with those hefty severance packages which board members receive when leaving companies, whether or not they deserve to be compensated.
There are times that the company sustained huge losses as the direct result of the actions of those members and it isn’t fair or right that they should be compensated for poor performance. By giving shareholders direct votes and the power to veto a board’s decision to compensate, Mr. Cameron believes that justice will be served.
Within the past several years, many companies have sustained huge losses as a result of actions taken by board members. This means that shareholders have had to pay for those mistakes twice in many cases. First by losses sustained by the company and secondly when board members are given huge remuneration packages when leaving the company because of poor performance.
In closing remarks about this acute problem, Mr. Cameron noted that small business men and women are working extremely hard in the UK to make a go of their companies without giving themselves huge rewards for so doing. There is growing discontent in regards to how larger corporations are rewarding mismanagement and he intends to do something once and for all about this problem through legislative measures.
