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Pay ratios needed
More than 90% of AAT members believe executive pay would be better controlled by the introduction of pay ratios, according to the AAT Corporate Governance Survey 2017.
However, the survey revealed that just one in five (21%) of AATs believe government plans to introduce a legal requirement to publish pay ratios will have any impact. Instead of the simple publication of information, most AATs would like to see a legally binding pay ratio requirement.
Support was strongest for a 20:1 pay ratio, as previously proposed by both David Cameron (in 2010) and Jeremy Corbyn (2017). There was also support for a 40:1 ratio (22%), the figure suggested by the High Pay Centre. John Lewis’s 75:1 ratio was the favourite option for 10% of AAT respondents.
No members backed a pay ratio of 150:1, the current average for FTSE 100 companies.
The AAT’s Adam Harper (pictured) said: “At a time of increasing wage inequity and growing distrust in corporate Britain, businesses and policy makers need to show that they are serious about reform.”
Harper felt that given the apparent failure of previous approaches the time for a compulsory pay ratio appears to be moving ever closer.
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