Overview

This bill amends the Companies Act 2006, requiring public quoted companies to disclose the ratio between the highest-paid director's or executive's annual remuneration and the average annual remuneration of the lowest-paid 10% of their workforce. This information must be prominently displayed in their annual reports.

Description

Key Provisions

The bill mandates that all public quoted companies in the UK must include the following information in their annual reports:

• The ratio between the total annual remuneration of their highest-paid director or executive and the average annual remuneration of the lowest-paid 10% of their employees.
• This ratio must be clearly displayed in bold type on the first page of either the chairman's statement, chief executive's statement, or directors' report.
• The individual figures for both the highest-paid director/executive's remuneration and the average remuneration of the lowest-paid 10% must also be displayed in bold type within the annual accounts.
• The definition of "remuneration" aligns with the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. Part-time employees' remuneration is to be pro-rata.

Implementation

The commencement date will be set by the Secretary of State via statutory instrument.

Government Spending

The bill is not expected to significantly impact UK government spending, as it primarily involves regulatory changes and increased reporting requirements for companies. No specific figures were provided.

Groups Affected

• Public quoted companies: These companies will face new reporting requirements, potentially increasing administrative costs.
• Shareholders and investors: Will have access to more transparent information about company pay structures, potentially influencing investment decisions.
• Employees: May gain a clearer understanding of the pay disparity within their companies.
• The public: Will have increased transparency into the remuneration practices of public companies.

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