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COMPANIES LISTED IN Britain will be required to reveal the gap between the salaries of their chief executives and employees, under draft legislation introduced in parliament this week.
All public companies with more than 250 employees will have to disclose and explain annually their “pay ratios” under legislation planned to come into effect from January 2019.
“Most of the UK’s largest companies get their business practices right but we understand the anger of workers and shareholders when bosses’ pay is out of step with company performance,” Business Secretary Greg Clark said in a statement.
Requiring large companies to publish their pay gaps will build on that reputation by improving transparency and boosting accountability at the highest levels, while helping build a fairer economy that works for everyone”.
The move comes after years of shareholder and public outrage over the pay for top executives, including at companies that have performed poorly.
There has been a series of shareholder rebellions over pay at company annual general meetings this year.
Frances O’Grady, leader of Britain’s Trades Union Congress, said: “Publishing and justifying pay ratios is a first step, but more is needed”.
“Fat-cat bosses are masters of self-justification and shrugging off public outcry. New rules are needed to make sure they change,” she said, calling for worker representatives to be included on boardroom pay committees for added fairness.
Rebecca Long Bailey, business spokeswoman for the main opposition Labour Party, said the proposals were “half-baked” and “do nothing to tackle the entrenched inequality”.
The government earlier this year implemented legislation forcing all UK companies with 250 or more employees to publish details of the salary difference between male and female employees.
- © AFP, 2018
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Watch the pay drop then bonuses and perks go up to hide the real pay.
@bmul: Historically when companies have been required to reveal executive pay, base pay has actually risen dramatically for the same positions in the following years because suddenly an exec can point out exactly what someone else in their role in a similar company is getting paid and in turn salaries rise up to the rate of the upper outliers rather than dropping to the median figure.
@Shane Corry: there was an undercover report on ch4 on this a while back, literally companies exist now to help you hide your real ‘gender ratios’ and pay gaps
“Listed Companies” is important here, it’s only publicly-traded companies and the fact is that nearly all of them disclose executive compensation already.
No private company should be forced to disclose financial information of their employees. Payment agreements should be strictly between employees and employers, not the state.
@Daniel Donovan:
If it’s about tackling the pay gap between rich and poor (which has been consistently growing for the past 30 years) I’d be all for it.
If workers want to challenge the pay gaps within the PLC that they work for all they have to do is but one share in that company and raise hell at the shareholders meeting.
@Value Bazzar: And that’s why most companies only sell shares in blocks and insist that their shares are sold in blocks making it virtually impossible to get your hands on a single share.
@John Ryan: I don’t know what broker you go to but I can buy any amount of shares I want including 1 single share. In fact I think Shane Ross did it with one of the banks so that he could speak at a shareholders meeting.
Instead of going through a convoluted formula of adding this, multiplying by that, finding the mean of the product can they not just agree to publish the hourly pay rate of every grade regardless of gender.
If you’re applying for a job you know what you’re expected to be paid per hour, it doesn’t matter what gender you are. This should be reflected through every grade right up to the CEO and published, everyone has a right to slag the boss off, or work to be the boss.
have your say