On 15 March 2011, the Treasury published the final Hutton report on fair pay in the public sector. This follows the interim report published on 1 December 2010. Although the majority of the recommendations set out in the final report relate to public sector companies, the report includes the following recommendations for private sector companies:
- Listed companies should be required to publish, monitor and explain top to median pay multiples in annual reports from January 2012.
- Companies delivering public services or supplying the public sector should apply the proposed 'fair pay code'. The code brings together various measures recommended in the report, including the disclosure of pay and details of executives' roles and linkage of pay to performance.
The Government announced in the Budget that it accepted the recommendations in the final Hutton report as a basis for consultation with public sector workers, trades unions and others and that it will set out proposals in the autumn that are affordable, sustainable and fair to both the public sector and the taxpayer. We will have to wait until then to see whether the Government pursues the recommendations for private sector companies.