Pay report 'not soft on fat cats'

A move to give shareholders greater influence over company executives' pay hasn't been watered down in the Productivity Commission's final report into their remuneration, chairman Gary Banks says.

The report, released on Monday, details the spiralling pay packets and bonuses of executives and proposes a range of measures, including preventing executives interfering with the committees that set their salaries.

But the so-called "two strikes" rule, where a spill of the board would follow two "no" votes by 25 per cent of shareholders to a remuneration report, has been softened.

Now the two minority votes would only trigger another vote requiring the support of a majority of shareholders.

But Mr Banks denies the changes weaken the reform package.

Having a separate "reelection resolution" would allow shareholders "to express their true view about the company's remuneration practices", he told ABC Radio.

"(Shareholders) can vote without fear that that no vote will trigger a re-election of the board that they don't want," Mr Banks said, adding the new approach still allowed shareholders "to bring the whole board to account".

"We think actually we've strengthened that recommendation in a way that makes it more targeted on the companies where shareholders are feeling unhappy with recalcitrant boards ... without having significant unintended consequences for companies that are doing the right thing."

Federal Corporate Law Minister Chris Bowen says the recommendation giving shareholders greater say on executive pay packets will help curb excessive pay.

"It will certainly concentrate the minds of those who have been less sensitive to the views of their shareholders, that shareholders and other stakeholders have important views to be borne in mind when dealing with executive remuneration," Mr Bowen told ABC Radio.

The government will announce its response to the Productivity Commission's final report by the end of March.