The Business, Energy and Industrial Strategy Committee (a Select Committee of the House of Commons) (the “Committee”) has announced that it has launched an inquiry into executive pay and gender pay gap in the private sector.
(In 2015, the Committee launched a wide-ranging inquiry into corporate governance generally, including executive pay, which culminated in the Committee’s April 2017 report, as well as the Government’s Green Paper in November 2016 and its response in August 2017.)
The new inquiry will cover the following:
- Whether businesses are complying with gender pay gap reporting requirements and whether those regulations properly capture staff salaries
- Steps companies are taking to address gender pay gap and measures that could be taken against non-compliant companies
- What work is being done to simplify the structure of executive pay and pay reporting
- The role of remuneration committees, institutional investors and shareholders in curbing excessive pay, and the role of “clawback” provisions in recovering cash and bonuses where performance is poor
Specifically, the Committee has asked for views on the following aspects of gender pay gap reporting:
- Is the annual information related to pay that is required under the Equality Act 2010 sufficient? Should any further information be required?
- What is the extent of compliance? Is the information accurate?
- How effective are sanctions for not complying with reporting requirements
- What requirements (if any) should there be on companies to address gender pay gaps?
It has asked for views on the following aspects of executive pay:
- What progress has been made on implementing the recommendations on executive pay in the Committee’s April 2017 report?
- What improvements have been made to reporting on executive pay in the last 12 months?
- What steps have been taken by remuneration committees and institutional investors to combat excessive executive pay in the last 12 months?
- What further measures should be considered?
The deadline for submitting views on gender pay gap reporting is 10 April 2018. The deadline for executive pay is 8 May 2018.