Rethinking reward: can pay ratio disclosures locate the path to fair pay in post-lockdown Britain
Thursday 16 July 2020
Rachel Kay, Researcher, High Pay Centre
Martin Buttle, Head of Good Work, Share Action
Janet Williamson, Senior Policy Officer for Corporate Governance, Trades Union Congress
From this year, major UK companies are required to disclose the ‘pay ratios’ between their CEO and their upper quartile, median and lower quartile earners in their annual reports.
High Pay Centre analysis of the first disclosures found that rethinking pay within top companies could be used as a way to give a post pandemic pay rise to the lowest paid workers including millions of key workers, and highlights the scale of pay gaps between top executives and their own colleagues.
Our research shows that reducing pay of top quartile employees at the companies our sample by 3% could fund a median pay rise of £2,000 for the lowest earning quartile of employees in the same companies. So far, the median FTSE 100 CEO to lower quartile employee pay ratio stands at 109:1
This event will discuss the findings of the research and examine the implications for policymakers, companies, investors and workers.
Will the pay ratio disclosures increase awareness about the pay inequalities within companies?
How can those advocating for fairer pay policies use the disclosures?
And what key data remains absent from the new reporting requirements?
Since 1 January 2020 the average FTSE 100 CEO has earned:
Income inequality in the UK
Wealth inequality in the UK
- HPC/CIPD Annual FTSE 100 CEO Pay Review - CEO pay flat in 2019
Median FTSE 100 CEO pay stands at £3.6 million - almost 120 times the average UK worker - but pandemic pay cuts could mean figure falls next year
- Blog: To ‘build back better’, we must tackle executive pay
New research has revealed how much CEOs earn compared to their colleagues – and the results aren’t pretty.
- Blog: COVID19 and corporate resilience
The pandemic is highlighting the deep flaws in the UK’s corporate governance system. Will this prompt listed companies to rethink their priorities? - A blog by Rachel Kay, a researcher at the High Pay Centre