“There is still a shocking disconnect between the pay for those at the top and the rest of the workforce at too many FTSE companies, despite efforts to rein in executive pay in recent years.
“The situation is likely to get worse before it gets better as higher inflation in 2017 will mean many frontline workers will face a pay squeeze at a time when FTSE 100 CEO pay is already 129 times that of the average employee.
“This disconnect demotivates staff at work, with a recent CIPD study showing that six in ten (59%) employees identify CEO pay as an issue that demotivates them at work. The message from the workforce is clear: ‘the more you take, the less we’ll give’. Business leaders need to ensure there is a is a much clearer link between overall top pay, organisation performance and the rewards of the wider workforce or risk reducing employee engagement and productivity at work.
“Government can also play a role in helping to provide more transparency over chief executive pay by requiring companies to publish the pay ratio between what the chief executive earns and median pay in their organisation. This will help place more scrutiny on whether top pay is proportionate to the performance of the business and improve overall fairness in organisations, at a time when many pay packets are being squeezed.”
