Will you be required to report the pay gap between your CEO and your staff?
From January 1 this year, UK listed companies were required to report the pay gap between their Chief Executives and average UK employees. For every £1 the average FTSE 100 company gave to an employee in 2017, its CEO got £145.
Under new law, companies listed on the London Stock Exchange with an average of 250 or more staff must publish a comparison of their CEOs’ annual earnings, including comparing the CEO’s salary to an employee in the bottom 25% of earners in the company.
The Government has published a set of rules to calculate the pay gap and CEOs must show that they have followed these rules when they submit their first reports in early 2020. In the report, businesses must also justify the CEO’s salary and it must be consistent with the wider pay, reward and progression policies that exist in the business. It is expected that the pay gap reporting requirements will bring with them a great deal of controversy as CEO salaries start to emerge.