UK forces companies to show worker, boss pay gap

Britain’s biggest companies will from 2020 be legally required to publish the gap between the salary of their chief executive and what they pay their average UK worker, under proposed new government rules.

“We understand the anger of workers and shareholders when bosses’ pay is out of step with company performance,” UK business minister Greg Clark said.

The new laws, which are subject to parliamentary approval, would improve transparency and boost accountability for both shareholders and workers, as well as helping to “build a fairer economy”. It’s part of the government’s “Industrial Strategy” and will come into effect from January 1, 2019.

When these rules were first proposed last year, they were criticised by union leaders who said they fell short of Prime Minister Theresa May’s promise early on in her tenure to tackle soaring executive pay.

But some campaigners and investors have questioned whether the greater transparency provided by disclosures on boss to worker pay will be enough to force companies to curb pay excesses.

Matthew Fell, chief UK policy director at British employers group, the Confederation of British Industry, said that the new legislation would help develop a better dialogue between boards and employees.

Luke Hildyard, director of think-tank, High Pay Centre, said the insight into pay ratios would be useful to investors, workers and wider society.

May has also implemented rules to highlight pay discrepancies between genders. –