Publishing Boss to Worker Pay Ratio Not Enough

Publishing Boss to Worker Pay Ratio Not Enough.

In an announcement today by the Business Secretary Greg Clark dubbed by Goverment as a “world-leading package of corporate governance reforms”, Mr Clark has published reforms to enhance the public’s trust in business with:

New laws for larger companies to publish pay ratios between bosses and workers

A register where company names are published if there has been ‘significant’ opposition to executive pay rises

Employees to be potentially allowed to sit on pay review boards of said companies or at least have a say

Comment

This is simply not enough.  Whilst, we must all agree that senior executive positions carry greater work hours, responsibility, stress and indeed are less secure that warrantss a significant pay package that will attract the best, we have all along suggested that any business should not be allowed to declare dividends (i.e. pay out net profits to shareholders) if

• Any employee is paid at a rate below National Living Wage
• Significant numbers of employees are still on tax credits (when they work full time e.g. 35hrs a week)
• There is a deficit on any company sponsored pension fund

Whilst not directly related to directors pay, there is both a social responsibility i.e. if employees are making employers profits, then they should at least have a living wage and a director should not be paid hundreds of thousands and indeed millions if workers are on tax credits nor should dividends be declared if ‘technically’ the company is in profit because they are underpaying workers or leaving pension shortfalls.

Perhaps, Government are watering this down as you guess where most employees will end up working/on boards if they leave Parliament?

Perhaps, there should also be ‘public referendums’ on MPs wages and pensions each year?