HPC has worked with a group of asset owners including the Church of England Pensions Board, Brunel Pension Partnership, People’s Partnership and Scottish Widows to create a new free-to-access online tool assessing the pay and reward practices of the UK’s leading companies.
This new tool, the Fair Reward Framework, launches today detailing the pay policies and practices of 65 FTSE 100 companies with the remainder of the index to follow on an ongoing basis. The assessments cover 30 indicators of fair pay processes and outcomes including:
- Reward scrutiny – including whether or not the company is a living wage accredited employer in the UK, whether they adopt living wage policies in other markets and whether or not their annual report commits to tax practices in line with the widely recognised GRI 207 standard.
- Reward policies – including whether or not workers are consulted as part of the executive pay-setting process, whether trade union coverage across the company’s UK workforce is disclosed in the annual report and whether or not the company board includes a director from the company’s workforce
- Reward outcomes – including CEO pay levels and pay ratios detailing the gap between Chief Executives and their median UK employee, as well as the company’s gender pay gap.
The framework is intended to inform, rather than dictate, stakeholder engagement with the assessed companies. It doesn’t, for example, make AGM voting recommendations or give an overall rating to individual companies – however by compiling key insights from the company’s pay practices it gives stakeholders that are making these judgements access to vital information in a clear, succinct and free-to-use dashboard format. Framework users can review pay outcomes at individual companies, analysing the way different stakeholder are rewarded (for example, situating CEO pay levels within the context of living wage of fair tax commitments) and the fairness of the processes that lead to them. Or they can compare performance against individual indicators to comparator companies.
The Framework is free to use rather than being subject to a subscription beyond the reach of smaller organisations. It is based on publicly available information, rather dependent on access to the assess corporations. And the indicators have been chosen on the basis of their relevance to the company’s societal impact, rather than the returns it generates for shareholders.