British Government Curbs Executive Pay

Major banks in Great Britain have agreed to curb pay of executives, to cut dividends for stockholders, and to continue loaning money to small business enterprises. The government is pouring hundreds of billions of dollars to support banks in order to prevent them from going under due to the financial crisis which now grips the world. The government expects to wind up securing ownership of many banks due to the money that is being placed in these enterprises. A major issue is the expression “performance-related pay” since the manner in which it has been applied has benefited individuals to gain enormous salaries.

However, it is unlikely the government will seek seats on Boards of Directors of those companies which obtain funds. Who knows, perhaps one day, the government will secure a share of these companies.

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