Two strikes and you are out

The Australian federal government is supporting the Productivity Commission's proposal to introduce a "two strikes" rule on executive pay.

Financial services Minister Chris Bowen and Treasurer Wayne Swan are backing changes that mean if more than 25 per cent of shareholders were to vote against a remuneration report for two consecutive years, then all directors must face election at an annual general meeting (AGM).

Mr Bowen said the change would benefit shareholders, without harming a company's ability to attract talented executives, and would mean that votes on remuneration reports would become binding.

Though some are unhappy about some of the detail, the measure does seems to have across the board support.