Executive remuneration has been growing much faster than average wages or share value – and company boards have largely failed to curtail this. So it’s the responsibility of shareholders to apply the pressure on boards to get a grip on high pay.
Can you get involved? Yes! Large shareholders have a key role here. But the majority of individuals will also be shareholders in FTSE 100 companies through their pension funds or ISAs – and everyone can ask their fund manager to take action with companies to curb excessive executive pay.
What you can do:
- Get this article published in your church or other newsletter.
- Write to your own fund manager or investment broker, asking the questions outlined in our report (see below)
- Let us know the response you get
- What is the ratio between the total remuneration of your highest and lowest and highest and median paid employee?
- Do you pay all employees and contract staff working on your premises at least a Living Wage? Has the company considered becoming a certified Living Wage Employer?
- How many workers and what proportion of your workforce is employed on temporary contracts or contracts without any guaranteed hours?
- What is the company doing to ensure that living wages are paid throughout its supply chains?
- How are employee perspectives taken into account when developing company strategy and setting pay?
- What is the company doing to ensure that its leadership succession plans prioritise the development of internal talent?
- Does the company accept that there can be business risks associated with growing levels of inequality in the UK? Do you consider that you have any ethical responsibility to help reduce levels of economic inequality?
Questions for fund managers and pension fund trustees
If you have investments held through investment managers or pension funds, you could ask them the following questions to ascertain to what extent they are raising concerns about pay inequalities with the companies in which they invest your money and to encourage them to do more in this respect.
- What are you doing to address low pay and insecure work within the companies you invest in on my behalf?
- How many companies have you raised concerns with or asked questions about pay inequalities?
- Do you publish information about how you have voted the shares/funds you manage in respect of company remuneration policies and reports?
- Do you specifically consider pay inequalities when deciding how to vote on company remuneration?