§ Lord Vinsonasked Her Majesty's Government:
Whether they will discuss with the Chairman of the Stock Exchange the possibility of making it a condition of public quotation that directors' salaries and contracts to be valid should be approved by the shareholders of that company at either a general or extraordinary meeting.
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Reay)No. A company's Articles of Association will generally provide that shareholders in general meeting will have the power to vary the remuneration afforded to directors in respect of their office as such. The Companies Act 1985 also provides a mechanism for shareholders to raise objections about such remuneration. Payments in respect of executive services are a different matter. However, under the Companies Act 1985, directors' service contracts for a period of five years or longer are subject to approval by a general meeting of the shareholders.