The High Pay Centre is calling for legislation to cap executive pay after a survey revealed that more than half of workers would support this.
Its poll of 2,000 employees found that 55% agreed that chief executive pay should be set as a multiple of workers’ low or average earnings so that differences between the highest and lowest paid do not grow too wide.
The think tank has also published a Charter for Fair Pay that calls on the government and employers to clarify workers’ rights on union participation, create boardroom seats for elected worker directors, establish a task force to promote worker ownership and enhance investor accountability, and to demand more transparent corporate reporting on executive pay.
Executive pay
The High Pay Centre poll found that 51% of respondents were in favour of voting for two workers on a board, while enhanced pay transparency was supported by 70%. Its charter suggests introducing a right for workers to know how their pay compares throughout their organisation.
The Centre is urging the government to use its draft Bill on audit reform, which was announced in the King’s Speech, and the Employment Rights Bill to “empower workers with a stronger bargaining position in pay negotiations and more say in business decision making”.
The audit reform Bill aims to strengthen corporate governance and director accountability, proposing sanctions for directors or auditors who fail in financial reporting duties.
In August, the Centre revealed that pay for chief executives in the FTSE 100 grew by 2.2% in 2023, and the median FTSE 100 CEO is paid 120 times more than the median UK full-time worker.
Its Charter for Fair Pay goes on to claim that “extreme income inequality is a defining characteristic of the UK economy”, as the UK ranks as the eighth most unequal of 40 major economies when it comes to income.
“Put simply, if our economy generated the same level of income but distributed it more evenly, in line with other European countries, most people would be significantly better off,” the report says.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Reward, compensation and benefits opportunities
Browse all comp and benefits jobs
