Legislation on pay ratios 'must be backed by action to reduce income inequality'

By agency reporter
June 11, 2018

 New laws will be laid before Parliament on 11 June 2018 which will require UK listed companies with more than 250 UK employees to disclose the salaries of their chief executives and the salary of their average worker. They will have to disclose this difference, the ‘pay ratio’ every year, as part of the governemnt's new Industrial Strategy. 

Commenting on the announcement from the Department for Business, Energy and Industrial Strategy, Dr Wanda Wyporska of The Equality Trust said: “Legislation forcing companies to publish their pay ratios is long overdue, given that a FTSE 100 CEO now earns an average (median) annual pay of £3.45 million per year, a staggering 242 times more than that of a minimum wage worker.

"Publishing pay ratio data will need to be backed by action that sees pay ratios reduced through decreasing excessive executive pay and increasing poverty wages. UK income inequality is among the highest in the developed world and evidence shows that this results in poorer mental and physical health, higher violent crime, poorer educational outcomes and lower levels of trust.

"Although this is a welcome first step, if passed, reporting is not due to start until 2020."

The Equality Trust is launching a ranking of the FTSE 100, sector-by-sector, on pay ratios, gender pay gaps, Living Wage commitment and corporate subsidies, so that investors, consumers and workers can make informed choices about where to invest, where to spend and where to work.

Analysis by The Equality Trust found the average pay for a FTSE 100 CEO is:

  • 108 times more than a nurse’s
  • 91 times more than a teacher’s
  • 84 times more than a police officer’s
  • 197 times more than a care worker’s

Top bosses' pay surpassed the annual salary of a minimum wage worker on Thursday 4 January, 2018.

* Read the announcement from the Department for Business, Energy and Industrial Strategy here

* The Equality Trust https://www.equalitytrust.org.uk/

[Ekk/6] 

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