Pay ratio legislation in the United Kingdom: a prospect

Abstract

Purpose

The article examines a current debate over pay ratio rulemaking in the United Kingdom. In the United States, the Securities and Exchange Commission issued a rule that requires public companies to disclose the ratio of the annual pay of their chief executive officer to the median of their employees’ pay in 2015. The United Kingdom has considered making a similar rule under Prime Minister Theresa May.

Design/methodology/approach

The article provides a concise analysis of the current debate over a rule regarding pay ratio in the United Kingdom. It also highlights characteristics and concerns by comparing pay ratio disclosure in the United States.

Findings

The United Kingdom seems to have taken the first step toward pay ratio rule, similar to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the so-called pay ratio disclosure. Some differences can however be found in manifestos and many issues and uncertainties still remain for rulemaking.

Originality/value

This article provides information on a prospect for a pay ratio rule in the United Kingdom.

Citation

Imai, A. (2017), "Pay ratio legislation in the United Kingdom: a prospect", Journal of Investment Compliance, Vol. 18 No. 4, pp. 78-82. https://doi.org/10.1108/JOIC-07-2017-0046