UK - Pension funds are backing government moves to clamp down on "golden handshakes" for top executives.
The NAPF said the department of trade and industry’s consultation paper on payoffs was long overdue.
But the DTI dismissed industry speculation that the consultation paper would propose capping payoffs for disgraced directors.
A spokeswoman said: “There has been speculation that we were capping boardroom payoffs to six months of salary, but that is pure speculation.”
No official date has been given for the release of the consultation paper, although it is widely expected around Easter.
The NAPF admitted that a change to six-month rolling contracts would take time and coordination on behalf of the government.
Political liaison officer Vicky Bolton said: “We’ve been saying for a long time that directors should be on one-year rolling contracts rather than two-year contracts and it is something the NAPF and other shareholder groups have had a lot of success with.”
The issue was highlighted in January, when Archie Norman MP introduced a private members’ Bill which aimed to force firms to consider directors’ performances when reaching pay-off agreements.
But the Bill was dismissed by ministers as “flawed”.
The Bill sought to soothe investors’ anger at excessive payouts for company heads.
High-profile examples include Royal & SunAlliance, which paid chief executive Bob Mendelsohn a £1m bonus – even though the firm’s value fell by £10.2bn – and Abbey National, which awarded chief executive Ian Hartley £1m shortly after the bank’s value fell by £8.6bn.
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