The government could introduce legislation next year to curb excessive executive pay, Business Secretary Vince Cable said on Sunday.
Cable, who believes high executive pay at some firms is not justified by performance, has set up a review to see what shareholders can do to moderate excessive compensation.
He is also trying to encourage British companies to have a more long-term culture rather than focussing on the short term.
We are going to see action on those (areas) in the new year, he told the BBC.
Asked if this meant legislation was possible next year to deal with high executive pay, Cable said: That's quite possible, yes.
Cable also said he had sympathy with the emotions that inspired protesters against the excesses of capitalism who are camped outside St Paul's Cathedral in London.
Cable is a member of the Liberal Democrats, the junior coalition partner with the Conservatives.
On executive pay, he said there were different ways to boost the role of shareholders in decision-making in their companies.
It was a question of getting institutions such as pension funds and insurance companies to be active and socially responsible shareholders, he said.
(There) may be reforms they can undertake themselves. It may require pressure from outside in legislative form, he said.
Pay at the top of Britain's biggest companies has soared in recent years while salaries for workers have barely kept pace with inflation, a sensitive issue while the coalition government pursues a tough deficit-cutting austerity programme.
The government has already acted to curb high bonuses paid to bankers. Some business groups say higher taxes and stricter regulation risk driving banks and insurers away from London.
Cable also indicated that the government would raise state benefits in line with inflation. Inflation hit a three-year high of 5.2 percent in September, unfortunate timing for the government as September is the month used to index state benefits and pensions from next April.
Of course they will go up with inflation, Cable said. However, he said there were issues about timing and detail to be clarified in the government's autumn financial statement on November 29.
Cable also took issue with calls by eurosceptic Conservative politicians for Britain to exploit the euro zone crisis to seek repatriation of some powers from the European Union to London.
We are not getting into that debate because it is not necessary ... Having an academic debate on which powers are ideally conducted at European level or British level is utterly irrelevant to the crisis we face, said Cable, whose party is pro-European.
(Reporting by Adrian Croft; Editing by Ron Popeski)