As the Government announces corporate governance reforms, research from the Pensions and Lifetime Savings Association (PLSA) highlights that 84% of pension funds are concerned about the pay gap in listed companies with 86% believing that executive pay in listed companies is too high.
Commenting on the research and the announcement, Luke Hildyard, stewardship and corporate governance policy lead, Pensions and Lifetime Savings Association, said:
“Today’s announcement that companies will need to disclose and explain the pay gap between their chief executive and ordinary workers is to be welcomed. For the average chief executive to receive 128 times the average pay of their staff is hard to justify and appears disproportionate in almost any circumstances.
“We are hopeful that today’s announcement is a concrete step forward which will see a more measured and transparent approach to executive pay. However, we would like to have seen stronger requirements placed on companies with regards to their CEO pay policies. Requiring a supermajority (75%) rather than a simple majority (50%) means that it would be harder for companies to force through pay proposals despite serious reservations from their most engaged shareholders.”
“Workplace pension schemes represent the interests of almost 20 million active members across the UK and invest trillions of pounds into the economy – they are some of the most long-term and engaged shareholders that companies have. It is clear that they are extremely uncomfortable with the executive pay culture that has taken hold across corporate Britain with the vast majority voicing concerns over the pay gap and executive pay in listed companies."
NOTES TO EDITORS
For a photo or additional comment, please contact:
Lee Blackwell, Head of Media & PR, Pensions and Lifetime Savings Association T: 020 7601 1726, M: 07713 073 023, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association T: 020 7601 1748, M: 07901 007713, E: [email protected]
The PLSA undertook a survey of fund members which completed in H2 2016. Responses were received from 53 funds with a median wealth of over £800m.
Number of Active members of workplace pension schemes – ONS Annual Survey of Hours and Earnings
Pay Gap – Department for Business, Energy and Industrial Strategy – Green Paper – November 2016