On 8th September 2016, the Bishop of St Albans, the Rt Revd Dr Alan Smith, asked Her Majesty’s Government “how they intend to address the gap between the remuneration of senior executives and their employees”. Baroness Neville-Rolfe responded for the Government. Her comments can be seen below, along with the follow up questions from other Members.
The Lord Bishop of St Albans: To ask Her Majesty’s Government how they intend to address the gap between the remuneration of senior executives and their employees.
The Minister of State, Department for Business, Energy and Industrial Strategy (Baroness Neville-Rolfe) (Con): We intend to publish a consultation document later this year which will set out a range of options for improving corporate governance, including measures to strengthen the way executive pay is set and reported. This follows on, and is in line with, the Prime Minister’s statements on this important subject.
The Lord Bishop of St Albans: I thank the Minister for her reply. I wonder whether she has read the report published last week by the High Pay Centre written by Chris Philp, the Conservative Member for Croydon South, which makes a number of recommendations, including requiring firms to create a shareholder committee with the power to ratify pay packages comprised of shareholders with longer-term holdings in the company. Will these proposals be part of the consultation that will be published?
Baroness Neville-Rolfe: I have not yet read the report, although I know that it was discussed in the House and I think it makes a very useful contribution. As I see it, that idea is in the mix of what we will consult on. The underlying objective is to make shareholders exercise much better oversight over company decision-making. The changes that we will be looking at, and indeed prior reforms, have been directed at this objective—some with more success than others.