'Pay transparency should support an inclusive company culture' - CMI comment on Fat Cat Friday

Posted On: 
4th January 2019

Chartered Management Institute (CMI) CEO Ann Francke speaks out on 

"Whilst we welcome the Government's action to require large companies to publish executive pay ratios, this is just a small step towards restoring trust in business leaders: we must see salaries linked to quantifiable performance indicators set by the board" - Chartered Management Institute (CMI) CEO Ann Francke
Credit: 
PA

UK workers waking up this morning will be rightly upset that in the time its taken them to get back into the swing of work, some FTSE 100 CEOs have already earned an entire average UK annual salary.

No-one begrudges any leader great pay for a great job, but employees just don't have confidence that performance comes into it. CMI research has shown that nearly three-fifths of FTSE 100 CEO pay is made up of LTIPs and shares - however this is the area of pay least tied to achievement, and more often linked to uncontrollable market forces.

Whilst we welcome the Government's action to require large companies to publish executive pay ratios, this is just a small step towards restoring trust in business leaders: we must see salaries linked to quantifiable performance indicators set by the board. Pay transparency should support an inclusive company culture, so why not link your CEO's salary to metrics on employee engagement and satisfaction?