The Business Secretary, Greg Clark, has increased the stakes in respect of executive pay. In legislation being laid before Parliament on Monday 11 June, the Government has set out plans to require businesses with more than 250 employees to annually publish and justify the pay gap between executives and employees. This legislation was first mooted in 2017, following a CIPD report which revealed that on average the salary of a FTSE 100 Chief Executive was 129 times that of the average worker.
The requirement to report on the pay gap is part of a package of reforms which aim to consolidate UK’s reputation as a world leading country in which to invest and do business. Other proposed reforms include requiring large private companies to report on their responsible business arrangements and requiring listed companies to report on the link between share price and executive pay.
Commenting on the proposal the CBI’s UK policy director, Matthew Fell, said “This legislation can help to develop a better dialogue between boards and employees about the goals and aspirations of their business, and how pay is determined to achieve this shared vision”