PLSA calls for executive pay disclosure

The Pensions & Lifetime Savings Association (PLSA) has dubbed the first Thursday in January, which was January 4th this year, as “Fat Cat Thursday”, as FTSE 100 chief executives will have earned more money by then than the average worker earns in an entire year.

PLSA stewardship and corporate governance policy lead, Luke Hildyard, commented: “Huge pay differences between executives and the wider workforce symbolise how too many companies fail to understand or appreciate the value of their workers.” He added: “As long-term investors, pension funds think that boards should be more sceptical about the need for vast executive pay awards and focus on explaining how they are fostering innovation, improving productivity and developing a positive employment culture throughout their organisations.”

Hildyard said that pension funds using information about employment, including pay gaps, are indicators of corporate culture. He commented: “While companies spend a lot of time devising complicated and very generous pay awards, our Hidden Talent research found that only 7% of FTSE 100 annual reports detail the ratio between the CEO’s pay and the wider workforce; only 21% provide evidence of how much they are investing in training and staff development; and just 7% show how much they rely on agency workers or other types of insecure employment.”