Firms to publish and justify pay ratio

Large companies to publish gap between
executives and average workers’ salary

One-Minute Read

The Business Secretary Greg Clark will tell Parliament today
that directors of all companies with more than 250 employees will
be required to disclose and explain the difference in pay, a move
welcomed by equal pay campaigners, business and investor
groups.

The new regulations also require listed companies to make clear
what impact a hike in share prices has on the pay of top
bosses.

There has been growing demand from investors for greater
director accountability and transparency over executive
remuneration.

The
BBC says in recent years shareholders have become “increasingly
vocal” over executive pay levels, and have voted against what they
see as excessive pay awards, most notably the high sums paid to
former WPP boss, Sir Martin Sorrell.

Several big firms have been hit by public outrage over bumper
executive pay, “with embarrassing shareholder revolts at firms such
as Shell, Astrazeneca and William Hill this year” reports The Independent.

The TUC hailed the new measures, which will come into effect
from 2020, as a “first step” but called for even greater rules,
specifically guaranteed places on boardroom pay committees for
workers, something they say would bring “common sense and fairness
to decision-making when boardroom pay packets are approved”.

Earlier this year thousands of businesses were forced to publish
their gender pay gap, revealing some 78% of firms
paid men more than women.