2015 Research in Review
A look at our research from this past year, including our major projects on performance related pay and pay ratios
Last month we completed a six-month project on pay ratios, which was generously funded by the Friends Provident Foundation. This work included an essay collection from leading figures looking at pay gaps within organisations – how and why they’ve widened, what the consequences of these gaps might be, and how we could calculate an appropriate ratio.
The final report from the project, called “Just Do It”, written by Paul Marsland, addressed the case for publishing pay ratios between the top and the middle in a business or organisation, arguing that such ratios would reveal not just the gap in pay but the gap in attitudes which inform different pay levels.
The report was launched at a half-day conference, with speakers including Ruth Bender (Cranfield University), Sacha Sadan (Legal & General), Daniel Godfrey (Formerly of the Investment Association), Jane Burgess (John Lewis Partnership) and Janice Turner (Association of Member Nominated Trustees).
Other highlights from the year included:
- A paper by leading economist Andrew Smithers - The Perverse Incentives of Modern Management and Remuneration - addressing how the structure of executives’ pay packages incentivises behaviour that is ultimately damaging the UK economy.
- A report looking at what the EU could do to tackle economic inequality, examining public attitudes towards existing rights at work guaranteed by EU agreements.
- We published findings that average FTSE 100 CEO pay climbed to £4.964 million in 2014, and that CEOs are now paid approximately 183 times the average UK worker.
- We also published findings that Scotland’s richest executives are paid £55 million between them, at an average of £1.6 million each.
We undertook a major project into performance-related pay: the project included a report by leading management writer, David Bolchover, examining the contribution of individual executives to company performance.
The final report from the project argued that performance-related pay is failing on its own terms and proposed a series of reforms.
The report was launched at a half-day conference, including Simon Walker (Institute of Directors), David Pitt-Watson (London Business School), Nicola Smith (Trade Unions Congress) and Andrew Smithers (Smithers & Co) as speakers.
- We completed our long project on corporate power and published an essay collection on the corporate colonisation of UK politics – “Whoever you vote for, big business gets in”.
- We published a report which asked whether remuneration companies are really independent, addressing the problem of poor disclosure by companies of the work undertaken by consultants.
- We held several other events including the “state of pay debate”, hosted with Queen Mary University of London, looking at the current state of executive remuneration. We addressed how executive pay damages the economy, the issue of the pay gap between top and bottom earners in London, why so few women in business are in positions of power, and we held an event with Vince Cable discussing the 2013 Pay Regulations two years on and the state of the UK economy. We also held highly successful events at the Labour and Scottish National Party Autumn Conferences.
Since 1 January 2017 the average FTSE 100 CEO has earned:
Income inequality in the UK
Wealth inequality in the UK
- Back to school - September update
It has been an interesting summer...
- Getting the story straight: university chairs’ attempts to deal with Adonis probe in public domain
As the pressure mounts on universities to explain excessive vice-chancellor salaries, the Committee of University Chairs' (CUC) response has been revealed. The text of a recent email is published here.
- Lord Adonis probes university governors on their approach to top pay
Andrew (Lord) Adonis is keeping the pressure up on the universities sector as he questions some excessive vice-chancellor and other top salaries. Here is the text of a letter he has just sent out.