Plans are being presented to Parliament that – if approved – will require public companies with over 250 employees to disclose the difference in pay between the Chief Executive and its average worker.

This difference is called the “pay-ratio”.

The government says this is part of legislation intended to improve corporate governance standards in the UK.

If approved the plans will come into effect from the start of next year.

Whilst the ‘average worker’ is unlikely to spend much time searching for these figures the press spotlight is going to fall on the massive differences in pay between senior executives and others in individual organisations. And although the pay levels of Chief Executives are known already, the statistics will tell people how far they fall behind the average rate of pay in their companies as a whole and how their companies’ pay compares with pay in other companies in the same sectors.

 

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