Equality innovator Gapsquare has released an executive pay gap calculator in push to close the national ‘fat cat’ gap. In the context of the government’s 2020 legislation calling for clarity on CEO earnings, tech has stepped up to allow companies to share these numbers easily, shifting the focus on driving change.
According to research from the High Pay Centre the average CEO from a FTSE 100 company earned more by 6th January 2020 than the average full-time employee will all year. This shocking figure should give us pause to consider how much we pay our leadership teams. The difference between CEOs and the average employee is becoming an essential conversation in some of the wealthiest companies in the UK.
“Companies need to remunerate their leaders fairly, taking into account risk and experience, but now is a great time to consider pay throughout your employee base”, notes Gapsquare CEO, Fair Pay in tech leader Zara Nanu.
“We’re seeing clients look at these numbers and evaluate how they structure reward for the leadership team, making sure they can justify this to employees clearly and with transparency”
This is the first year that companies in the FTSE 100 have had to openly report their executive pay figures revealing, in the context of rising equal pay issues and debates around the gender pay gap, a growing need for employers to talk to their employees about pay.
A spokesperson from the High Pay Centre, an independent think tank investigating the upper echelons of the UK’s income distribution shared their thoughts on the importance of progress on this agenda, noting: “It is increasingly clear that there has been a policy and market failure in relation to pay at the top of companies and the structures of business over a period of years under all governments.
This has resulted in a number of socially and economically damaging outcomes from low pay and in-work poverty to companies limiting their potential through investing too heavily in top pay. This money could instead be invested on research & development or staff training, which may prove more impactful in enabling growth and business success.”
Gapsquare is providing companies with the ability to instantly generate and monitor their numbers in order to track CEO pay ratios compared with the average employee. They are hoping that bringing innovation to leadership pay could transform the way we work and evaluate value.