Research: Pay ratios and the FTSE 350

The High Pay Centre’s analysis of the first ‘pay ratio’ reports finds some limitations to the disclosures, but also provides insights into low pay and inequality across corporate Britain.

The research, funded by Standard Life Foundation, is based on new pay ratio disclosures, published in 2019/20 for the first time, following rules requiring listed companies with over 250 UK employees to disclose their CEO’s pay relative to the upper quartile, median, and lower quartile pay of their UK workforce.

Key findings:

• 36 companies – 18% of the sample – pay at least a quarter of their employees less than £20,000 a year (on a full-time basis).
• Of these, 34 companies pay all lower quartile employees below the annualised equivalent of the London Living Wage (£19,565), while 11 pay below the annualised equivalent of the Real Living Wage (£16,926).
• The median CEO/median employee pay ratio across the FTSE 350 was 53:1 and the median CEO/lower quartile employee ratio was 71:1. These ratios are significantly higher for the FTSE 100, where the median CEO/median ratio was 73:1 and the median CEO/lower quartile ratio was 109:1.

The High Pay Centre makes a range of recommendations in its research to help further strengthen pay ratio reporting.