Business Secretary Vince Cable has pledged to crack down on Britain's culture of excessive pay for senior executives.
The Cabinet minister signalled moves to make it easier for ordinary shareholders to prevent company bosses being awarded huge sums without delivering exceptional results.
In an interview with the Sunday Times as the Liberal Democrats hold their conference in Birmingham, Mr Cable said remuneration had "exploded" and UK firms had a "particular problem".
"The performance of companies has not demonstrably improved, yet people are being paid an awful lot more. There's something happening that isn't right," he said.
"You don't have this problem to anything like the same extent in Scandinavia, Germany, France. It's a particular feature of our markets. There is lots of evidence of reward for failure."
The Government has ruled out attempting to cap or fix salaries but could make it easier for shareholders to vote on pay in advance, and ensure that their views are binding.
The Business Secretary said: "We wouldn't want to fix salaries; it is not practical. The other route is to try to influence companies directly through their shareholders - getting the shareholders to be more active in influencing pay. We will in due course be setting out exactly how."
In a speech kicking off the conference on Saturday night, party leader Nick Clegg upped his efforts to differentiate his party from the Tories and placate discomfited activists. He insisted Lib Dem ministers were fighting "tooth and nail" for the party's values behind the scenes and imposing their will on their "political enemies".
The combative comments came as the gathering in Birmingham delivered a stinging rejection of welfare reforms which would place an "arbitrary" time limit on sickness benefits.
The party leadership also narrowly avoided further embarrassment over the government's controversial NHS shake-up. Members voted by 235 votes to 183 in favour of allowing an emergency motion on the changes to be debated. But because the bid fell short of a two-thirds majority it will not be eligible for selection - sparking cries of "Shame" from the floor.