Top executives to be put under further pressure to disclose pay ratios
Britain’s largest companies will be pressured into publishing the ratio between executive and average workforce pay by a working party report to be released tomorrow.
A working party set up by the Investment Association – which includes key business leaders – will recommend such disclosure of boardroom pay, but will stop short of making it compulsory, according to Sky News.
The final report is due to be published tomorrow after an interim report that lambasted current executive pay practices as “broken” and “not fit for purpose” was released three months ago.
The working party is chaired by Nigel Wilson, chief executive of insurance giant Legal & General. Other members include Sainsbury’s chairman David Tyler, Boris Johnson’s former pensions advisor Edi Truell and Newton Investment Management boss Helena Morrissey.
The recommendations follow promises by Theresa May to curb executive excesses. She said before becoming Prime Minister that ratios ought to be published and as part of her leadership bid advocated that annual shareholder votes on executive pay ought to be binding.
Sources said a binding annual pay vote on Britain’s largest companies was discussed by the committee, but it remains uncertain whether or not it will include it in its recommendations.
Once the recommendations have been made to the Investment Association – a body that represents companies with £5.5 trillion under management – they will be considered during the trade body's forthcoming review of the principles of the organisation.