The changes allow shareholders a binding vote on a company's pay policies every three years and an advisory vote each year.
They also require a company to simplify pay data by publishing a single figure rather than the wide range of numbers that is current practice.
Exit payments - commonly known as golden goodbyes - for directors who are sacked or resign must also be published.
Previously, while shareholders were able to vote on executive pay packages every year, their votes were not binding, so in theory the board could ignore the vote.
The aim of the new rules is to improve transparency over executive pay and shareholders' ability to monitor it. They follow years of investor anger over rising boardroom salaries.
"Over the last decade the pay of our top executives has quadrupled but it has not always been an indication of how well a particular company has performed."
Cable said. "At the same time company reports have become increasingly complicated without giving shareholders the right sort of details they need in order to evaluate performance.
A powerful incentive
Tom Kerr Williams, an employment partner at law firm DLA Piper, told HR magazine the new changes should provide a "powerful incentive" to boards and remuneration committees to increase shareholder consultation on pay and implement proportionate remuneration policies.
"As such, it will be important for companies to retain a sufficient degree of flexibility, discretion and judgment in their remuneration policy in order to remain competitive and to be able to successfully implement the policy over each three-year period," Kerr Williams said.
Andrew Stanger, a partner at international law firm, Mayer Brown said there is "some debate" over whether the new measures will put UK's corporates at a disadvantage in attracting the best global talent.
Stanger said it is "doubtful" whether shareholder votes will significantly curb executive pay levels in the UK so that they are no longer on a par with global counterparts.
"We may see a more robust approach from remuneration committees in linking pay and performance more explicitly," Stanger told HR. "It will be interesting to see the extent to which the reforms achieve their aims."
Opposed to change
A majority (60%) of FTSE board members believe the new rules are "unworkable", according to a survey by executive headhunting firm Hedley May.
The study of 248 senior executives also warned the changes will promote rather than diminish pay inflation, because of a lack of flexibility so not enough room for judgement over exit payments or joining policies.
"While there appears to be a consensus that change needs to take place with regard to how CEOs and top executives are compensated, it seems equally clear that there is no broad agreement that the Government's proposals are the right way forward," Hedley May partner Deborah Warburton said.
