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ARTICLE · 09 JANUARY 2019

Executive Pay Gap Rules Now In Force

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Under regulations which came into force on 1 January 2019, UK-listed companies with more than 250 UK employees must now publish certain executive pay data in their annual reports.

United KingdomCorporate/Commercial Law

Under regulations which came into force on 1 January 2019, UK-listed companies with more than 250 UK employees must now publish certain executive pay data in their annual reports.

The new regulations are part of the government's efforts to improve transparency and accountability in corporate governance, and are a response to criticism that companies should justify executive salaries.

Quoted companies with more than 250 UK employees must provide the following in their directors' remuneration report:

  • the ratio of their CEO's total remuneration to the median (50th), 25th and 75th percentile full-time equivalent remuneration of their UK employees; and
  • supporting information, including the reasons for changes in ratios from year to year and, in the case of the median ratio, whether, and if so how, the company believes this ratio is consistent with the company's wider policies on employee pay, reward and progression.

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