Kay review takes on executive pay A report commissioned by Business Secretary Vince Cable to investigate whether the UK equity market works effectively "to generate returns for savers and to improve the performance of companies" will outline a series of measures designed to end a culture of "short-termism" among the investment community. The review, by economist John Kay, will call for pay policies that better reflect companies" long term performance rather than quick gains, with recommendations to include greater control and transparency for investors on directors" pay. Prof Kay will also attack the pressure that quarterly reporting puts on fund managers to meet short term targets. He may even recommend scrapping public companies" obligation to publish quarterly trading updates. A new set of "fiduciary standards" will be proposed, which would formalise duties of care for institutional investors, making them focus on long-term company and shareholder value to tackle a culture of arms-length ownership and rapid sales of shares. The publication of the review follows a series of investor rebellions. Penny Shepherd, chief executive of the UK Sustainable Investment and Finance Association, said Prof Kay's report could eventually prove as influential as the 1992 Cadbury Report, which led to an overhaul of corporate governance standards: "This will be hugely important - but probably as a slow burner." Prof Kay's proposals will reflect earlier calls from senior business figures that asset managers should act as "stewards" of the firms in which they invest, rather than simply buying and selling shares for short-term gains.