SHAREHOLDERS should make their voices heard in the fight against so-called "fat cat" payments to executives.

Following Tuesday's publication of the Government's consultation paper, Reward for Failure, business analysts have urged shareholders in Worcestershire to speak out against excessive payments for executives who fail.

Professor David Green, principal of University College Worcester and a professor of economics, said 'people power' could be very persuasive.

He said the best way to change the situation was for shareholders to make their feelings known, either directly or through the investment companies managing their pension funds.

"Many people have tens of thousands of pounds invested in pensions but do not actually, directly, own a single share," he said.

"It is very important that the people with trustee responsibility for these pension funds take their responsibility seriously on behalf of the investors.

"They must be very active in making sure companies are being run properly. It is quite wrong, ethically, morally and economically, to reward somebody for bad performance.

"But there is a lot that can be done on this. People are very powerful and once it gains ground it could be very important in improving the standard of the way companies are run in Britain."

Neil Skidmore, a partner at PKF, in The Butts, Worcester, agreed the issue of "fat cat" payments was a shareholder issue.

He said shareholders should attend the AGMs of their portfolio companies and "make their voice known".

"Shareholders should not be afraid to go along and have their say," he said.

Performance

"The meetings are normally held in accessible places and you might even get a sandwich and a drink out of it!"

He said executives needed to be paid good salaries, otherwise they would go abroad, but the salaries should be tied to good performance.

"Accepting that it is an international market, you have got to pay big salaries to get the best talent. But it is the performance criteria that needs to be looked at.

"Companies' remuneration committees should include non-executive directors who set the criteria in a sensible way and police the criteria properly, rather than letting the executive directors - who would be the ones to benefit - do it."

John Guyatt, a director at Rabjohn's Business and Tax Advisers, in College Yard, Worcester, said the voice of the small shareholder was becoming increasingly powerful.

"Traditionally, individual shareholders in large companies have been in a weak bargaining position, with only the large shareholders - including institutional shareholders - having any real power.

"However, with profile, PR, and brand increasingly important, the voice of the small shareholder is becoming more significant as companies realise they have to deal with any objections raised by the minority."