Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 22nd October 2019 Commons Chamber

[Kelly Tolhurst]

My hon. Friend is right, and that is what the Government’s reforms have done. As I outlined, shareholders have a vote every three years and an advisory vote every year. Through the reforms, we have also enabled employee directors, non-exec directors or employee councils to have representation on the board. Companies now have to explain their wider pay policy and how it affects the whole company.

[Rachel Reeves (Leeds West) (Lab)]

The chief executive of Thomas Cook was paid more than £8 million during his time as chief executive of a company that has now collapsed, costing 9,000 jobs in this country, with 150,000 customers having to be brought home at a cost to the taxpayer. When he gave evidence to our Select Committee last week, he said he would reflect on whether he will pay back any of his bonus. What will the Government do to ensure that bonuses can be and have to be clawed back after catastrophic failures of businesses like that?

[Kelly Tolhurst]

I thank the hon. Lady for the work she is doing on the Select Committee. Thomas Cook did have clawback and malus arrangements in place for the recovery of directors’ bonus payments in specific circumstances, as required by the UK corporate governance code. My right hon. Friend the Secretary of State has asked the Insolvency Service to fast-track an investigation, and it will report back. As the hon. Lady outlined, the CEO did advise the Committee on 15 October that he would consider voluntarily surrendering some of his 2017 cash bonus, but it must be pointed out that no bonus was paid to the ex-CEO in 2018.