UK - Trade union calls to limit directors' contracts to three months have been criticised as "excessive" by pension funds.
The Trades Union Congress says pay packages are “out of control” and believes the government should limit directors’ contracts to three months to bring them into line with senior staff.
Head of economic and social policy David Coates said: “We are looking for the law to send a clear signal that British boardroom culture should change.
“Business has been saying ‘trust us, we’ll get it right’ for 15 years but nothing has changed.
“Now it is time for a clear marker to be put down. I am confident that would have an effect on business behaviour.”
But the TUC’s views, outlined in its evidence to the House of Commons trade and industry committee examining executive remuneration, were attacked by pension funds.
National Association of Pension Funds spokesman Andy Fleming said: “Corporate governance best practice states that directors’ contracts should be one year maximum, and companies are even starting to have contracts of less than a year.”
He said legislation limiting contracts to a three-month maximum would be “excessive”.
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