Union says law on pay disclosures should go further

A UNION has said big firms having to justify their chief executives’ salaries and reveal the gap with their average worker does not go far enough, with the new laws due to be discussed in Parliament today.

For the first time, UK listed companies with more than 250 employees will have to disclose and explain every year the socalled “pay ratios” in their organisation.

The move follows concerns that some chief executives have been receiving salaries that are out of step with company performance, say Ministers.

Business Secretary Greg Clark said: “One of Britain’s biggest assets in competing in the global economy is our deserved reputation for being a dependable and confident place in which to do business.

“Most of the UK’s largest companies get their business practices right but we understand the anger of workers and shareholders when bosses’ pay is out of step with company performance.

“Requiring large companies to publish their pay gaps will build on that reputation by improving transparency and boosting accountability at the highest levels, while helping build a fairer economy that works for everyone.”

The new regulations also require listed companies to show what effect an increase in share prices will have on executive pay.

The TUC’s general secretary Frances O’Grady said: “Publishing and justifying pay ratios is a first step, but more is needed.

“Fat-cat bosses are masters of self-justification and shrugging off public outcry. New rules are needed to make sure they change.

“We need guaranteed places for worker representatives on boardroom pay committees.

“That would bring a bit of common sense and fairness to decision-making when boardroom pay packets are approved.”