Three New Year’s resolutions to level the playing field on pay
ACCA (the Association of Chartered Certified Accountants) has released three New Year’s resolutions to level the playing field on pay to coincide with the day on which, according to the National Pay Centre, average earnings of FTSE 100 CEOs will surpass what the average UK worker will earn during the whole of the year.
Link pay to long-term company performance. Directors have a duty to ensure the sustainable stewardship of the companies they manage – long-term company performance should be the yardstick against which they are remunerated.
Align pay at the top and the bottom. Where sustainable targets have been met, companies should also consider how those at the lower end of the pay scale can be rewarded for their contribution. Solutions might include limiting executive pay to a specific multiple of average pay across the organisation and introducing wider incentives and benefits to reward effective performance at all levels.
Publish clear company policy on pay and performance as part of a wider commitment to transparent corporate culture. How companies communicate their remuneration policy is arguably as important as the actual remuneration levels and companies should ensure that their disclosures around pay are easily understandable. Government should also be emphasising the importance of transparency and accountability within the current reporting frameworks.
Commenting on the National Pay Centre findings, ACCA head of corporate governance Jo Iwasaki said:
“Business leaders have an opportunity to set a new tone from the top at the beginning of 2017. By adopting these resolutions, business leaders can help move UK corporate culture on to a more transparent and sustainable footing.
“ACCA research has previously found that our members rank ‘tone at the top’ as having the strongest influence on corporate culture in an organisation.”
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Notes to Editors
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com