Consultation launched on the setting of executive pay

The Financial Reporting Council has launched a consultation, which could propose to ban full-time executives from holding part-time boardroom roles which set the pay at rival companies.

According to analysis by Manifest, 31 per cent of FTSE 100 companies had a full-time executive from a rival firm sitting on their remuneration committee in 2012.

The consultation will also look at how bonuses can be clawed back from directors.

The consultation has been launched in response to new laws introduced by business secretary Vince Cable, which requires companies to hold a legally binding shareholder vote on pay polices.

Lady Hogg, chairman of the Financial Reporting Council, said a decision to change the existing corporate governance codes would only be made once the consultation was completed.