Greenbury passes buck on pay issue

The Greenbury Committee is to refuse to accept any responsibility for continued monitoring of top-pay issues. It is likely to recommend that this job is taken over by the new version of the Cadbury Committee on corporate governance, which is about to be launched.

The decision is thought in part to reflect the high and sometimes embarrassing public profile of the Greenbury Committee, whose members' own pay has been subject to intense scrutiny. Only last week Sir Richard Greenbury, the chairman, courted controversy over his 17 per cent rise in annual pay to pounds 807,000.

Although it was not set up as a continuing body, it nevertheless plans to make a statement underlining its unwillingness to take a monitoring role.

It has also emerged that the committee has found no evidence to support claims that directors of public companies scratch each other's backs in pay awards. It is expected to issue a challenge to anybody who can produce evidence that directors sit on each other's remuneration committees and boost one another's pay.

The committee, due to report on 19 July, has deliberately made no distinction between executive and non-executive directors, and has ignored US suggestions that non-executives should be paid entirely in shares.

The latest Greenbury draft rejects pressure to reduce the length of executive contracts to one year and opts instead for two years. The argument against too big a reduction is that companies would be swamped with compensation claims for contract changes. Any further reduction is to be left to the Cadbury Committee to discuss.

Among the ideas firmly rejected by the committee are proposals to put the report of the remuneration committee to shareholders and annual re- election of the chairman of the remuneration committee.

Members are also thought to be against separately publishing the remuneration committee's report on the grounds that much of the information will be contained in a proposed enlargement of the salary disclosure section of the annual report.