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UK to require major firms to publish, justify pay gap between CEOs and staff

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UK to require major firms to publish, justify pay gap between CEOs and staff

The U.K. will require big locally listed companies to annually disclose the pay gap between their CEOs and their average employee amid concerns that some big bosses have been receiving salaries that are incompatible with company performance.

Under the proposed rules, companies with more than 250 employees in Britain will also be required to publish and justify the so-called pay ratio every year. Subject to parliamentary approval, the regulations take effect at the beginning of 2019, meaning affected companies will have to start reporting their pay ratios in 2020.

The U.K. will also oblige listed companies to show the impact of an increase in share prices on executive pay. Private companies will meanwhile be required to report on their responsible business arrangements.