Dr Wanda Wyporska, Executive Director of The Equality Trust, said:
“We are calling on the Prime Minster to be bold in reducing the immoral and unequal gap between millionaire CEOs and their workers, many of whom are struggling to make ends meet. When the average FTSE 100 CEO is earning 145 times more than a teacher, then it’s clear we need bolder proposals. We cannot continue to rely on shareholders to reduce executive pay, as they have repeatedly failed to do so.
“Pay inequality in this country is at dangerous levels. We know this damages society, but it also damages businesses, eroding trust between workers and management. Productivity will not rise when you shut workers out from decision-making and ratchet down their wages, all the while feting ‘superstar’ executives.
“Instead we need workers to be a given a genuine voice, with a say on how their business is run, and how its success should be shared fairly. The only way to achieve this is through workers sitting on boards and being represented on remuneration committees, so the Government mustn’t take this off the table.
“We also need greater transparency for consumers and workers, which means the Government must press ahead with plans to require large and medium sized businesses to report the pay ratio between their CEO and average paid employee.
“We fear that the Green Paper’s current recommendations are half measures, and will not build the economy for all that this Government has pledged.”
Key recommendations by The Equality Trust include:
No extra powers for shareholders
Compulsory requirement for large and medium sized companies to report their top to median pay ratio
Employee involvement in remuneration committees
Genuine consultation with employees regarding remuneration committees
Greater employee representation in board decisions through worker representation on board
The Equality Trust’s full response can be seen here.
Notes to editors
The Equality Trust is a registered charity that works to improve the quality of life in the UK by reducing economic inequality. UK income inequality is among the highest in the developed world and evidence shows that this results in poorer mental and physical health, higher violent crime, poorer educational outcomes and lower levels of trust. Inequality affects us all. For further comments or to arrange an interview, contact John Hood on 07580 651 337 or firstname.lastname@example.org