Nov 27, 2012

Beware the clawbacks: govt to legislate on executive pay

The government will attempt to standardise executive pay reports in legislation this week, in order to disclose take-home pay for execs and to allow for bonuses to be clawed back in times of crisis.

Myriam Robin — Media Reporter

Myriam Robin

Media Reporter

Proposed laws standardising how executive pay is reported have been welcomed, with reservations, by remuneration and corporate governance experts. The government’s legislation has two strands: firstly, to require companies to disclose take-home pay for their executives, and two, to require companies to have policies in place to claw back bonuses in situations where financial accounts are misstated.

Many companies already do one or both of these things, says remuneration expert Michael Robinson of Guerdon Associates. He says many large companies report more than is required by law, including take-home pay, in an attempt to make their reports more understood.

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