Customers May Get to Vote on Executive Pay

Wednesday, 28th November 2018

As a part of a report commissioned by the party’s shadow chancellor John McDonnell and shadow business secretary Rebecca Long-Bailey, there are recommendations to have the renumeration of executives at 7,000 large companies in Britain subject to a binding annual vote.

The report says that stakeholders in the business should have a say in pay packages, and it classifies stakeholders as being not just shareholders and employees, but also consumers. The party says that it will be looking closely at the findings of the report, which was produced by a team led by Sheffield University professor of accountancy and finance Prem Sikka.

Shadow Chancellor McDonnel says that the scale of bonuses, and the opaque way that they are sometimes granted, should be a source of shame to the government. He is calling for action to tackle causes of inequality, including executive pay and the differential between executive and employee pay packages.

The report calls for changes to company law that would give stakeholders the right to propose caps on executive pay and bonuses, and argues that the inequitable distribution of wealth that is generated by employees is a key social problem for the UK and is something that is exacerbating inequalities.

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