international employment law firm alliance L&E Global
United Kingdom

UK: CEO Pay Ratio Reporting

For financial years starting in 2019, all UK listed companies with more than 250 UK employees will have to publish and explain every year the differences in pay between their chief executive and staff.

These rules, which were introduced because of concerns raised in recent years that some chief executives’ pay was out-of-step with company performance, are part of a wider package of corporate reforms which the government hopes will “hold big businesses to account for the salaries they pay, while giving employees a greater voice in the boardroom.”

Companies subject to the new rules will need to include a table in their directors’ remuneration report, setting out the ratio of the CEO’s total remuneration to the 25th, median and 75th percentile of UK employees’ pay – as well as explanations about certain aspects of the pay ratio information.

For a detailed update on this, see our update: CEO pay ratio reporting – are you prepared?