Is Vince Cable castrating non-execs over bosses' pay?
My train is chugging up the snow-carpeted mountain to the Alpine resort of Davos, once a refuge for consumptives and now, at the World Economic Forum's annual meeting, home-from-home for the world's more conspicuous consumers (bankers, hedge fund managers, private-equity stars, inter alia).
It is therefore inevitable that a business editor's thoughts turn again to the widening gap between top people's remuneration and the rewards more widely available.
In particular I've been pondering Vince Cable's notion that authorisation of a company's planned pay policy should require 75% of shareholders to vote in favour - and that such a vote would be binding.
To remind you, at the moment the annual vote by investors on a company's remuneration report (which is basically the story of what has happened to executive pay, rather than what will happen) has an advisory status.
That said, the boards of companies are usually pretty horrified if there is a big vote against the company or there looks as though there may well be. That was demonstrated only today, when Cairn Energy withdrew a controversial plan to make special payments totalling £3.5m to the oil company's chairman, in the face of opposition from shareholders.
So the current advisory vote is by no means toothless.
But what would be the impact of requiring a 75% vote in favour on prospective pay and making the results mandatory?
It all depends on how you define votes against.
According to research by the proxy voting service Manifest, if abstentions are counted as votes against, then some 67 FTSE100 companies would have lost the remuneration vote on a 75% threshold since the advisory vote was introduced a decade ago.
But if abstentions are ignored, only three FTSE100 businesses would have had their pay policies thrown out. These would have been GlaxoSmithKline in 2003 and - in 2009 - Royal Dutch Shell and Royal Bank of Scotland.
So the future autonomous power of boards to set the pay for top executives they deem appropriate hinges to a great extent on whether Vince Cable defines abstainers as genuine protesters.
I confidently predict something of a punch-up on this technical aspect of PLC democracy: many FTSE100 bosses will wish to keep the abstainers disenfranchised.
That said, don't assume that actually having the pay policy thrown out is the be all and end all. As I have said, few non-executives have the confidence to blithely ignore a sizeable investor minority manifesting displeasure with how and how much executives are being rewarded. (To have a public punch-up with serious investors is career-limiting for a non-exec.)
And there is another thing about requiring 75% assent for a pay policy - it could undermine the status of boards in a fundamental way.
Well, setting remuneration is a pretty basic duty of non-executive directors. So if the assent of 75% of investors for a pay policy were required, the status of non-executives could well be debased. They might well become pay advisers rather than pay deciders.
Would that be good for the confidence and authority of boards? And if non-execs became forelock-tugging lackeys of investors, or slaves of the lowest common denominator of investors' perceived interests, would that be good for the wealth creation that keeps pension funds afloat and pays for our public services?
What would be preferable - many would say - would be non-execs sensitive to the preferences of investors and the interests of the wider world, but acting as independent thinkers, rather than non-execs desperately searching for compromise pay solutions that appeal to more or less every shareholder.