Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, with reference to the oral contribution of the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy of 30 January 2018, on executive pay, whether he has plans to restrict the level of executive pay in FTSE 100 companies through government procurement rules.

What quoted companies pay their directors is ultimately a matter for their shareholders, who have a binding vote on the remuneration policy determining executive pay. However, the Government intends to introduce new measures to increase accountability and transparency in executive pay, as part of the corporate governance reforms announced in August 2017.

These include a new statutory requirement on quoted companies to disclose and explain each year the ratio of their Chief Executive Officer’s total annual remuneration to the average annual remuneration of the company’s UK employees. Companies will also be required to track and explain changes to the ratio over time, and explain how the ratio relates to pay, reward and progression policies for the company’s employees as a whole.

The Government is additionally introducing a new statutory requirement for quoted companies to set out clearly and publicly the impact of share price changes on complex, long-term incentive schemes.