Take Action on High Pay

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:

Engaging for pay equality: Questions for companies
The following questions could be directed at companies by shareholders, pension fund investors or investment managers.
  • 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?

Our 25th Anniversary

Supporters and partners gathered at Southwark Cathedral on October 22nd to celebrate ECCR’s Silver Anniversary.  The afternoon began with a Thanksgiving Service at which ECCR Patron Bishop Richard Harries preached on what has been achieved so far, and the many challenges which remain.  (Download his sermon) ECCR’s other Patron, Bishop William Kenney, gave the Blessing.

The Order of Service, which contains resources which may be more generally useful in acts of worship, can be found here.

This was followed by a Panel Debate on “Investing in Equality”, led by Catherine Howarth from ShareAction, former MP John Battle, and Toby Quantrill from Christian Aid.

ECCR’s new report on Fair Pay was launched; Sabrina Gröschel gave a presentation on the Ethical Money Churches project; and John Arnold presented the ECCR 2013/14 Annual Review.

Using Ethical Investment to Close the Gap: Fair Pay

To mark its 25th anniversary, the Ecumenical Council for Corporate Responsibility (ECCR), the church investor advocacy coalition released a report ‘Using Ethical Investment to Close the Gap: Fair Pay’, a radical call to action for the investor community to use their ownership responsibilities to address ever increasing levels of wealth inequality in the UK.

John Arnold, Executive Director of ECCR, said “For too long investors have presided over a corporate system that over-rewards the elite whilst leaving many employees at poverty level. We want individual and institutional investors to join their church investor colleagues, and revisit their responsibilities, as owners of businesses, to challenge companies to tackle low pay and insecure work.”

Acknowledging that one in five British workers are paid below a “living wage” and – in the same financial year – the average FTSE 100 Chief Executive Officer earned £4.7 million, the far-reaching report calls for FTSE AllShare companies to:

  • Ensure that all staff working on their premises, be they employees or subcontractors, are paid a living wage
  • Provide greater transparency on differences in pay by disclosing the extent to which senior executive pay exceeds average employee pay.

Bishop Michael Doe, Chair of ECCR, stated that “As we approach a General Election there needs to be a concerted effort by Christians and others to show that an increasingly unequal society is bad for the people involved (whether they are at the top, or pushed to the bottom by the declining value of wages and benefits), for society as a whole, and often for business itself.”