Sir, Merryn Somerset Webb, in “For unacceptable faces of capitalism, look in the mirror” (FT Money, July 30), says that the real solution to executive pay issues is a binding shareholder vote on pay. Perhaps she is right. But Vince Cable as business secretary in the coalition government rejected this as unworkable for several reasons. First, it surely cannot be retrospective. More importantly, if the pay settlement is voted down, how is the board to know what pay package shareholders actually want for the director(s) in those circumstances? Just like the EU referendum, a vote against something can only supply half the answer. Ultimately, there is no substitute for active and regular engagement with boards of the kind that some (but not all) institutional shareholders already practise.
Berwin Leighton Paisner,
London EC4, UK
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