Patricia Hewitt to monitor the executive pay

The Government is to set up a dedicated unit to monitor executive pay and corporate governance during the forthcoming season of annual general meetings. The move is expected to be announced in the Department of Trade and Industry’s response to its consultation on tackling ‘rewards for failure’ in company boardrooms that sparkled outrage in the City during last year’s AGM season.

The consultation, launched last June, ruled out government regulation of pay. It drew attention to rules, introduced in 2002, requiring company boards to give shareholders a vote on remuneration report at annual meetings.

But it made clear that the Government wad considering a range of legislative options to counter the refusal by some companies, such as GlaxoSmithKline, to respond to concerns from shareholders about excessive levels of pay.