Mind the pay gap: Companies will be required to disclose regularly the ratio of the median annual pay of all their employees to that of their chief executive.

Une nouvelle alerte de PIRC, cabinet de conseil anglais indépendant spécialisé dans les questions de gouvernance et de responsabilité sociale des entreprises:

We’ve commented previously in PIRC Alerts about the ramifications of the widening pay gap between executives and other employees. The FT reports that the Dodd-Frank reform bill contains a little-noticed provision that is likely to increase scrutiny in this area.

Under the provision companies will be required to disclose regularly the ratio of the median annual pay of all their employees to that of their chief executive.

Given that the US leads the field in high executive pay, expect some eye-watering ratios to be disclosed as a result.
Could the UK follow suit? There is currently a consultation underway at BIS in respect of narrative reporting. It includes a question about the adequacy of directors remuneration reporting requirements. Could this be an opportunity to raise the idea of disclosure of pay ratios for UK companies?