asked Her Majesty's Government:

What measures they will put in place to prevent excessive salaries, bonuses and pension payments for senior company directors; and [HL3875]

Whether they will propose measures to increase shareholder influence at annual general meetings in order to prevent excessive remuneration of senior company directors. [HL3878]

The Government are keen to see effective linkage between pay and performance. Exceptional rewards for mediocre performance are not in the interests of the companies, their shareholders or the UK as a whole.

Directors’ remuneration is a matter for companies, their shareholders and remuneration committees. The Directors’ Remuneration Report Regulations 2002 introduced full disclosure for directors’ remuneration and a shareholder vote on the directors’ remuneration report at quoted company annual general meetings. Shareholders are also responsible for the appointment and removal of directors.

The Government will introduce a new requirement relating to directors’ remuneration for quoted companies. The new requirement will mean that quoted companies, with effect from financial years beginning on or after 6 April 2009, will have to report how they have taken into account pay and employment conditions elsewhere in the business when setting directors’ pay.