2024 saw the first change of governing party in the UK since the High Pay Centre was founded in 2011. The different approach of the new administration has already been made very apparent through a number of policy announcements in the areas we work on, including a major programme of employment rights, and plans for a draft ‘Audit Reform and Corporate Governance Bill.’
The lesson for Sir Keir Starmer’s government from the US election, as well as the struggles faced by centre-left parties in Europe, should be that unless his administration can bring about a tangible improvement to living standards and wellbeing, Labour will face an uphill task to get re-elected. HPC’s recent ‘Charter for Fair Pay‘ published in partnership with the abrdnFinancial Fairness Trust, sets out some initial ideas for how they might do so through effective implementation of the Employment Rights Bill, plus reforms to corporate governance, investment stewardship and corporate reporting. The report’s recommendations are focused on strengthening worker voice in business decisio-making, encouraging a more participatory business culture and boost pay by empowering workers to claim a fairer share of the wealth created by their labour. The report was launched at an event with Business and Trade Select Committee Chair Rt. Hon. Liam Byrne MP and former TUC General Secretary Baroness O’Grady.
Other highlights this year have included the launch of HPC Director Luke Hildyard’s book ‘Enough: Why It’s Time to Abolish the Super Rich‘ published by Pluto Press and launched in Spring at an event with former Financial Times writer and new Labour MP Yuan Yang. The book argues why a major programme to re-distribute and re-direct income and wealth held by, or flowing to, the richest 1 per cent should be an obvious, urgent and realistic societal priority, and that we won’t fulfil our potential to raise living standards without one.
We also published our annual review of CEO pay this summer. The report was covered by BBC News, Sky News, the Financial Times, Guardian, Bloomberg, Mirror, the Times and Daily Mail.
And we have been busy producing reactive commentary and analysis in response to the campaign by corporate and financial services lobbyists for American-style CEO pay awards in Britain. Our letter to investors, co-signed by over 20 leading academic experts on top pay and income inequality, outlines the weak business case and huge socio-economic risks associated with executive pay increases.
Meanwhile our ‘Fair Reward Framework‘ for assessing the pay outcomes and pay governance processes at FTSE 100 companies, developed in partnership with a coalition of asset owners and research support from Minerva Analytics, offers an alternative approach to top pay focused on responsible stakeholder stewardship and fair and proportionate outcomes for all the different contituencies that contribute to business success.
Proponents of the view that the solution to the UK’s economic malaise is to make super-rich people even richer will be no less vociferous in 2025, and their wealth and prominence mean that this view is likely to be widely amplified. HPC will continue to argue for an approach to pay and business practice aligned with the wider socio-economic interest and for regulations and incentives that support this objective. With the implementation of the Employment Rights and Corporate Governance Bills as well as the finalisation of a new UK Stewardship Code it is sure to be a busy year and we will try our best to influence these developments for the better. Thanks to everyone who has followed and supported our work in 2024!