The prime minister is believed to had been forced to abandon policies aimed at cracking down on executive remuneration despite her previous pledges to curb excessive pay on UK boards.
A government official told the Financial Times that the corporate governance paper, due to be published next week, will still include several policies designed to improve pay transparency.
The official told the newspaper, “Our response will introduce reforms to make our largest companies more transparent and more accountable to their staff and shareholders and restore the balance between a company’s performance and executive pay. Our system of corporate governance is rightly held in high esteem but there is more to be done.”
The dropped policies were aimed at giving UK shareholders more powers to challenge boards, including a proposal for more binding votes on remuneration. Under the new rules, a 25% protest over pay packages would trigger a binding vote on a company’s remuneration policy.
It emerged yesterday that FTSE 100 executive pay has fallen by 19% this year as remuneration committees have started to address shareholder concerns.
Research from Deloitte also revealed that the median bonus that executives can earn has remained at 150% of salary, but in the top 30 companies the median “bonus opportunity” had fallen from 200% to 185% of salary over the last four years.
For executive directors in FTSE 100 companies, the potential long-term award fell from 235% to 225% of salary, while their chief executives saw their potential award fall from 400% to 365% this year.
The report followed analysis from the Chartered Institute of Personnel and Development (CIPD) and the think-tank High Pay Centre, released earlier this month, which said the average pay package of a FTSE 100 chief executive fell by 17% in 2016 amid political pressure, public disapproval and campaigning.