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CBI To Wade Into Pay Debate As May Plots Crackdown

Britain's biggest employers' group is wading into the escalating row over boardroom pay as Theresa May prepares to unveil a crackdown on soaring executive remuneration deals.

Sky News has learnt that the CBI has begun consulting with members about a range of policy options that will be announced later in the autumn.

The consultation - which has not been publicly announced - is the first such exercise undertaken by the CBI for years, and comes as the Government plots new measures to rein in boardroom pay.

Downing Street officials are working on proposals which insiders believe will include forcing companies to give shareholders annual binding votes on the bonuses of their top executives.

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Mrs May referred again this week to her desire to curb excessive pay and clamp down more broadly on company misbehaviour through wider reforms of corporate governance practices.

Major investors have locked horns this year with dozens of companies over remuneration packages, with the likes of BP and Weir Group (Other OTC: WEIGY - news) suffering humiliating defeats.

Sports Direct International (Other OTC: SDIPF - news) , meanwhile, has become the subject of a bruising City campaign to oust its chairman amid evidence of dire working conditions for thousands of employees.

Campaigners against high pay point to above-inflation rises for the bosses of FTSE-100 companies, with the average soaring 10% to £5.5m last year.

Earlier this week, Chris Philp, a Conservative MP, published a report in which he called for the creation of shareholder committees at all listed companies.

The new committees would have powers to approve pay policies, and assume responsibility for hiring and firing directors.

Mr Philp, who secured support from Lord Myners, the former City Minister, and top fund manager Neil Woodford, held talks about his proposals on Tuesday with Downing Street officials.

His report was published just weeks after that of a panel endorsed by the Investment Association, the fund management industry's lobbying group.

Its members, who included the chief executive of Legal & General (LSE: LGEN.L - news) and chairman of J Sainsbury (Other OTC: JSAIY - news) , called for listed companies to begin publishing the ratio of pay between their bosses and average employee, and argued that boardroom pay had become too complicated for shareholders to understand.

Details of the CBI's pay reform proposals are unlikely to emerge until a common position is approved by its membership, sources said this weekend.

A CBI spokesman confirmed to Sky News that the lobbying group was "in the early stages of consulting our members on executive pay".