Three-fifths of UK organisations not prepared for executive pay ratio reporting

24 December 2019

Payroll software and services provider, MHR, collated the responses from a Twitter poll that included 1,000 people who would be responsible for reporting the executive pay gap at their company. The results highlighted that a staggering 60% of businesses are still not prepared for the new rules which will come into effect in 2020.

UK listed companies who employ over 250 employees are required to report the pay ratio between their chief executive and what are classed as “average” employees, due to legislation that was introduced in January 2019. Employers will be obligated to disclose this information on a yearly basis, and it is crucial that payroll professionals and companies, in general, are well prepared for the upcoming changes.

The figures that will be reported are the ratio of the CEO’s pay to the median, lower quartile and upper quartile pay of UK employees. There will also be the added requirement for large companies to report how directors take employee and other stakeholder interests into account, and large private companies will need to report on corporate governance arrangements.

The rationale behind the introduction of the new rules is to ensure that Britain’s largest businesses are held to account for exorbitant salaries and to provide employees with a greater voice in the boardroom. This all ties in with the wider ambition to make the UK one of the most attractive places to work and also to invest in and grow businesses.

CIPP comment

 The CIPP offers a comprehensive online training course that assists individuals and organisations in relation to preparing for the upcoming obligations surrounding disclosing figures relating to the ratio between the pay of CEOs and “average employees”. The next session will be held on 5 February 2020, and you can enrol here.


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