Directors face annual vote on remuneration

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Company directors are facing a compulsory annual shareholders' vote on their remuneration package, under proposals agreed between the Department of Trade and Industry (DTI) and the Treasury.

The issue has been given fresh impetus by the row over pay-outs this week to the former chief executive and deputy chief executive of Marconi, although the move is just the latest in a long series of ideas on how to tackle excessive pay.

The payouts to Lord Simpson and John Mayo were a blow to shareholders, who had encouraged Derek Bonham, chairman, to resist compensating the executives for loss of office.

A month ago the Association of British Insurers said that, although contracts should normally be honoured, Marconi's were exceptional circumstances. It called on the company to take legal advice.