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UK Weighs Dropping Curbs on Executive Pay to Lure Firms

By Bloomberg

(Bloomberg) -- The UK government is studying plans to relax restrictions on executives’ remuneration to make the City of London more appealing to businesses post-Brexit.

The move was first reported by the I paper, which cited a letter from Boris Johnson’s chief of staff to Chancellor of the Exchequer Rishi Sunak that outlined “deregulatory measures.”

The Department for Business, Energy and Industrial Strategy confirmed in a statement that the government is exploring “whether there are any unnecessary restrictions on paying non-executive directors in shares, which could ensure they are fully invested in the success of the company they run.”

It’s also looking to strengthen the rules on clawing back bonuses from directors if their company collapses to stamp out “rewards for failure.” There are no plans to change existing rules covering executive pay for firms listed on stock exchanges.

The UK has long promised reforms to boost the attractiveness of the City after Brexit. New rules allowing firms issuing dual-class shares to list on the top tier of the London market were introduced late last year, aimed at luring more technology firms to go public while retaining significant stakes.

But plans to ease restraints on some of London’s top earners won’t be easy when UK is in the throes of a bruising cost-of-living crisis and facing a string of labor strikes this summer.

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