This article made headline news on Wednesday 4th January. A recent CIPD study showed that six in ten (59%) employees identify CEO pay as an issue that demotivates them at work. The message from the workforce is clear: ‘the more you take, the less we’ll give’.
With headlines that declare Britain’s top bosses earning the equivalent of £1000 per hour,how can you ensure your employees are engaged as they come back to work in the New Year? Employers wanting to create a fairer pay strategy could consider the following:
1. Link pay to long term company and individual - use wider incentives and benefits that are fair and can be applied at all levels
2. Publish a clear policy on pay and performance - show transparency and publish the pay ratio between the highest and average earner before the government takes steps to force companies to reveal the gap in earnings between their CEO and the average employee
3. Include a wide representation of the workforce on a strengthened remuneration committee that sets executive pay. Ensure that executive salary decisions are grounded in common sense and fairness.
In 2015, the High Pay Centre calculated that median FTSE 100 CEO pay in 2015 was £3.973million based on the publicly disclosed “single figure” measure. When taking into account the long hours CEOs work, and the few holidays they take, they are paid the equivalent of over £1,000 an hour