The UK's Department of Trade and Industry (DTI) has reportedly decided to scrap its "Rewards for Failure" white paper on executive compensation packages.
Initially announced in June 2003, the paper contained proposals for legislation to restrict directors' contracts and notice periods, tighten performance-related pay, and ensure that any pay-outs to departing executives are not received in one lump sum.
The government also announced at the time that it was planning to invite views on whether legislation could be introduced which would force company boards to take underperformance into account when calculating payoffs, without leaving them liable to legal action from the executive in question.
However, it appears that the DTI is now backing away from making a decision on the matter.
It has been suggested that this reluctance to legislate may stem from the fact that the DTI wants to address company law reforms, and to examine the results of its consultation on director and auditor liability before making a decision.
The DTI refused to comment on reports that the white paper has been scrapped. However, an announcement on the matter is expected from the Department in February.
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