Companies would also be made to publish details of middle-range salaries and consult employees on future executive pay deals, Vince Cable said.
The plans, which would hit all firms with more than 250 employees, would ensure pay and perks are "properly aligned with performance", said the Business Secretary.
Mr Cable said: "In the last decade we have seen extreme increases in top executive pay which appear to be completely unrelated to the performance of companies.
"Policies that reward executives out of proportion to the value they create are a clear dereliction of their duty and act against the interests of shareholders and consumers.
"There is widespread consensus, not just among the public but in the business community as well, that this is unacceptable and is undermining the credibility of our markets-based system. By making companies be transparent on executive pay and involving employees in salary proposals, the Liberal Democrats will make sure rewards are properly aligned with performance."
Exorbitant pay deals have caused widespread anger as Britain's recovery from the economic crash continues to remain sluggish.
Earlier this year, Mr Cable told Britain's leading companies to show restraint over executive pay to restore public trust, warning that excessive deals were a "dereliction of duty" and would lead to new legal curbs.
New rules came into effect last autumn forcing listed firms to give shareholders powers to reject directors' pay packages.