High Pay Centre Research: Five years of pay ratio disclosures
Analysis of pay ratios disclosures in the FTSE 350, funded by the abrdn Financial Fairness Trust, shows that CEO to worker pay gaps remained stable from 2019-2024 with a brief narrowing of the gap during the Covid-19 pandemic.
The median ratio of the CEO pay to that of the median full-time UK employee was 52:1 across FTSE 35O companies in 2023/24, down from 54:1 in 2022/23.
The median pay ratio of FTSE 350 CEOs to lower earning colleagues at the 25th percentile (or lower quartile threshold) of the UK employee population was 71:1 in 2023/24, down from 75:1 in 2022/23.
The report argues that while the pay ratio disclosures have major limitations and imperfections that ought to be addressed, they have filled a gap in corporate reporting.
As such, to improve the information on pay ratios that provide investors, workers and other stakeholders with consistent, comparable data on pay levels of workers outside the boardroom, the report recommends that:
- Companies should provide more detailed information on how many jobs they provide at different pay levels
- Outsourced workers, who often carry out very low-paid work, should be included in the pay ratio calculations
- Companies should be required to communicate information on CEO-to-worker pay gaps directly to their workforce, as well as publishing the figures in their annual report.
