Attack on plot to dilute top pay curbs

TIM MELVILLE-ROSS, a member of the Greenbury Committee on top pay, this weekend attacked the Stock Exchange's attempts to water down two of the committee's key recommendations.

Mr Melville-Ross, who is head of the Institute of Directors, said he was deeply concerned about current moves to emasculate recommendations on the disclosure of directors' pension benefits and the rules governing directors' bonus schemes.

"It's absolutely not what we intended," he said. "And I would be surprised if what I am telling you would not be agreed by everyone on the committee."

Mr Melville-Ross is the second Greenbury member to voice his concern publicly. On Thursday, Geoff Lindey, chairman of the National Association of Pension Funds' investment committee, said "powerful voices" were trying to block Greenbury.

"There is a very real threat here. They must not succeed," Mr Lindey told the association's autumn conference.

Two recommendations are under threat: that companies should publish the true value of pension entitlements awarded to directors and that shareholders should be allowed to vote on directors' bonus plans that run over more than one year.

As far as pension disclosure is concerned, as first revealed in the Independent on Sunday a fortnight ago, the Stock Exchange has put pressure on the Institute and Faculty of Actuaries to withdraw the formula it originally proposed and hold consultations that could lead to a formula that spreads disclosure of the true cost over several years.

On bonus plans, the rule change proposed by the Stock Exchange would allow bonus plans of up to three years to escape a shareholder vote.

The attempt to nobble Greenbury has been confirmed by several independent sources close to the events. The growing fight is expected to pit listed companies, which fear disclosure will lead to damaging headlines, against institutional investors, who stand to gain the most from companies revealing how much bosses get.