In response to the High Pay Centre report on CEO pay Peter Cheese, Chief Executive at the CIPD, the professional body for HR and people development said: “There is still a shocking disconnect between pay for those at the top and the rest of the workforce in large companies. Worse still, this gap is continuing to grow despite our latest data showing that it leads to a real sense of unfairness that has a clear impact on employee motivation.
“A recent CIPD study showed that six in ten (59%) of employees say that high levels of CEO pay in the UK demotivates them at work. The message from employees is clear: ‘the more you take, the less we’ll give’. This kind of culture in the workplace is bad for both employers and employees. Furthermore, when pay for those at the top is not linked to either personal performance or business outcomes, it undermines trust in business, not just from employees but from customers and other stakeholders.
“That is why the CIPD support Theresa May’s call for action to be taken on executive pay. A simple first step to tackle this would be to require publicly-listed companies to publish pay ratios between the CEO and full-time employees. This will serve to encourage accountability and force a greater focus on senior pay among key stakeholder groups, such as investors who can help to drive change and hold businesses and senior individuals to account. We also need to see more action from the top – either from boards or more Chief Executives’ themselves taking a public stand and putting a stop to these inexplicably high salaries and bonuses. As we head into an uncertain economy, this can only become a more pressing issue.”