The prime minister told the BBC's Andrew Marr Show yesterday morning there had been a "market failure", with some getting huge rises despite firms not improving their performances.
The report shows 'stratospheric pay increases' which have seen wealth flow upwards to the top 0.1% away from average workers.
The report Cheques with Balances: Why tackling high pay is in the national interest, states: "During the last 30 years rewards have been flooding upwards, with far more modest returns going to the average employee. Since the mid 1970s, the general workforce's share of GDP had shrunk by over 12% up to 2008
Paul Randall, partner at law firm Ashurst, said: "Following David Cameron's interview by Andrew Marr yesterday, it is increasingly clear the Government is going to legislate further on executive pay, in particular as to disclosure of pay, the composition of remuneration committees and to give shareholders more specific votes on bonuses and termination payments than they have at present.
"There is certainly a problem with executive pay. The widespread concerns being voiced go well beyond the politics of envy.
"Hopefully, the overall outcome will be to enable and encourage long-term investors to exercise their votes more effectively in this key area. British companies, and their shareholders, will suffer if the changes simply implement clunky processes or unduly restrict the board's power to manage the business."
