General Insurance Article - ABI welcomes announcement on executive remuneration

 Commenting on the announcement today by the Business Secretary Dr Vince Cable on measures to tackle excessive executive pay, Otto Thoresen, ABI Director General, said:

 “Dr Cable’s proposals are practical, workable and should help tackle excessive executive pay. These powers would give investors more influence to ensure Boards do their jobs and link pay to performance with clear accountability to shareholders.

 “The ABI strongly backs a forward looking binding vote on pay strategy and we are pleased the Government has decided to proceed with this with a 50% voting threshold. Having a vote on a three year remuneration policy should help the task of keeping executive pay proportionate and aligned to corporate strategy; having a fixed annual vote on pay has tended to drive up pay in practice rather than restrain it. We also welcome the Government’s decision to include exit payments in the forward looking vote; again this will help ensure exit payments are within previously agreed boundaries. “