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An independent report commissioned by Labour shadow chancellor John McDonnell and shadow business secretary Rebecca Long-Bailey suggests that staff and consumers should have more say over executive pay at the UK’s largest 7000 companies.
The report also calls for major UK corporations to for disclosures and revised remuneration approval practices to be introduced.
How does Labour wants to change executive pay?
The proposed reforms in the report call for increased transparency over pay and suggest that companies in the UK with more than 250 employees should reveal names of staff members who are paid more than £150,000 per year.
The report says that ‘the cult of bonus payments’ should be discouraged and that bonuses should only be paid to employees where the company can demonstrate that they have displayed an ‘extraordinary performance’.
The Labour party is also considering allowing ‘stakeholders’ the ability to vote before executive bonuses are approved, with the company requiring ‘support from at least 90% of all voting stakeholders to approve each item of bonus’.
The report also calls for a ban on golden handshakes and large-scale severance pay-outs, which it says have become a way of boosting executive pay and must be prohibited.