§ Mr. Austin MitchellTo ask the Secretary of State for Trade and Industry if he will propose legislation under which all increases in directors' pay and perks would be subject to a specific resolution at the annual general meeting.
§ Mr. RedwoodTo subject directors' executive pay increases to a resolution of the company annual general meeting would be cumbersome and ineffective. At present the details of directors' service contracts over one year are, with some exceptions, required under the Companies Act 1985 to be made available for inspection by shareholders, who may ask questions or put forward resolutions at the annual general meeting. In addition, directors' service contracts for a period of five years or more are subject to approval by general meeting. This strikes a fair balance, in my view, between the need for the interests of the shareholder to be taken into account and flexibility in the recruitment of directors.