A majority of UK workers believe chief executive pay should be capped to ensure a fairer balance between bosses and employees, according to a new survey.
The poll was conducted by the High Pay Centre thinktank. It found 55 percent of respondents support linking executive pay to worker earnings to prevent widening disparities, while only 15 percent opposed the idea.
Calls for Fair Pay and Transparency
The survey sampled over 2,000 people and was funded by the Abrdn Financial Fairness Trust. It revealed strong support for initiatives aimed at reducing income inequality:
- Capping CEO Pay: 55 percent agreed that executive salaries should be tied to worker pay to limit income gaps.
- Worker Representation on Boards: 51 percent supported the idea of having two workers on company boards, with only 11 percent opposing.
- Enhanced Pay Transparency: 70 percent favored publishing details of employees earning over £150,000 annually.
Luke Hildyard, Director of the High Pay Centre, emphasized the need for a more democratic and participatory business culture.
He said the policies wouldn’t dictate pay outcomes but would create a framework for reducing inequality and increasing pay for low- and middle-income workers.
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Growing Income Inequality
Income inequality remains a defining characteristic of the UK economy. The Organisation for Economic Co-operation and Development (OECD) has ranked the UK as the eighth worst among its 38 member countries.
Only Bulgaria and Lithuania rank lower among EU member states.
In 2022, income inequality in the UK, as measured by the Gini coefficient, increased by 1.3 percent.
This was driven largely by a 3.4 percent drop in disposable incomes for the poorest 20 percent of households, compared to a 3.3 percent increase for the richest 20 percent.
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Policy Recommendations
The High Pay Centre plans to publish “A Charter for Fair Pay” ahead of the forthcoming Employment Rights Bill. The charter will advocate for:
- Greater worker representation in boardrooms.
- Increased transparency around top earners.
- Policies aimed at fostering a more collaborative workplace culture to drive economic growth.
Hildyard highlighted the legislative opportunity to address inequality through strengthened worker rights and more equitable pay structures.
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Economic Context
The UK’s economic growth has lagged within the G7 group of wealthy nations, with the country’s growth rate recently slipping near the bottom of the group.
Chancellor Rachel Reeves has set a goal of making the UK the fastest-growing G7 economy but faces challenges, including addressing income inequality.
A recent survey of UK businesses showed the first contraction in activity in a year, with firms criticizing the government’s budget plans for increasing costs to fund enhanced public services.
This underscores the urgency of implementing policies to balance economic growth with income fairness.
The findings from the High Pay Centre suggest that public appetite for reducing pay disparities and strengthening worker rights is growing, signaling a potential shift in how businesses and policymakers address income inequality in the UK.