Grants / Projects we are funding

Development of a maximum pay ratio: High Pay Centre

Grant details


Awarded on:01/05/2015


Area of interest

Systems change

This project aims to explore the feasibility of establishing a maximum pay ratio to ensure a sense of fairness over pay at big corporations. This would be part of a major reinvention of the structure of pay to ensure everyone benefits from corporate success.

What is the issue?

Growth in pay over the past 10 years has accrued principally to the top 1% of the income scale with wages for everyone else stagnating. Chief executives of FTSE 100 companies have seen their income triple in the past 15 years to an average of £4.5m. The ratio between top and average pay at these big companies has increased from 47 times in 1998 to 121 times in 2014.

Business leaders are being rewarded disproportionately for success that is created by everyone in their company. This has led to a strong feeling of unfairness on the part of the wider workforce and a growing lack of trust in business.

Low wages mean the taxpayer subsidises working people to the tune of £4bn a year in tax credits and benefits. This has fuelled the political debate about living standards in the run-up to the election and a growing feeling that businesses are run for the benefit of a wealthy elite.

What will the project try to achieve?

The High Pay Centre will look at how rewards could be spread more evenly throughout the workforce by analysing the development of corporate pay ratios. The project will examine whether a benchmark ratio can be set across the corporate sector or whether this could be done on an industry by industry basis. It will look at how a benchmark ratio could be incorporated into the corporate governance code.

Who might be interested in this project?

This project will be of interest to shareholders, unions, the public and policymakers. It should be of importance to anyone who works for a big public corporation.

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