UK: banks and executive pay - Lord Myners replies

Yesterday, in the House of Lords, Lord Lea of Crondall asked the Government this question: "whether they will place an annual limit of £500,000 on the pay of executives in financial institutions in receipt of substantial public funding". Amongst his comments in reply, Lord Myners, the Financial Services Secretary to the Treasury, observed:

"...all shareholders take risks which relate to equity capital, and the Government, through UKFI, stand alongside other shareholders in that respect. We have been very clear that we find the level and structure of reward in the banking sector unacceptable. We have invited Sir David Walker to lead a report in this area. From my perspective, one of the things that it should address is the insidious influence of external benchmarking and comparators by so-called benefit consultants. There needs to be much more awareness of internal comparators and perceived fairness. The rewards and remuneration for those at the top of the organisation have simply become detached from those of their colleagues and from reality. There should be further disclosure, and there are important roles for shareholders".

For the official record, including other questions and replies, see here. It would be interesting to know what further disclosure Lord Myners envisages, given what must already be disclosed in the remuneration report. It would also be interesting to know if Lord Myners supports the Companies Remuneration Reports Bill which if passed would require companies to disclose the ratio between the total annual remuneration of the highest paid director or executive and the total annual average remuneration of the lowest paid ten per cent of the workforce. The Bill, which was introduced in the House of Lords, has had its first reading but a date for second reading debate has not yet been fixed.