(Reuters) – British Business Secretary Vince Cable on Tuesday warned banks and other major companies to rein in excessive executive pay or face tighter rules, in a letter aimed at Barclays (LSE:BARC) and other FTSE 100 companies ahead of their annual general meetings.
In a letter to companies listed on the blue-chip FTSE 100 index Cable reminded them how ‘excessive and disproportionate pay’ damaged trust.
“There is now an opportunity for companies to make peace with the public,” he said.
Cable also wrote that pressure for further legislation to limit executive pay would be inevitable unless businesses acted responsibly.
His warning comes days ahead of Barclays’ annual general meeting on Thursday where Chief Executive Antony Jenkins is expected to be criticised for last year increasing bonuses for investment bankers despite a drop in profit.
“This is particularly true in the banking sector where pay reached dangerous levels and with Barclays in particular coming up on Thursday,” Cable said adding “we will see how far they have listened to pressure from the people who own the banks – the shareholders”.
Last year Britain tightened rules on how companies decide directors’ pay, including requiring businesses to detail what was paid to each director and giving shareholders a vote on remuneration policy at least every three years.
In the “shareholder spring” of 2012, investors mounted several high-profile challenges to executive pay packages, frustrated at boardroom salaries rising when share prices were declining. Some high-profile bosses, such as Andrew Moss at insurer Aviva Plc (AV.L) and Sly Bailey of British newspaper group Trinity Mirror, stood down.
(Reporting by Karen Rebelo in Bangalore and William James in London; Editing by Eric Walsh)
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