LABOR WILL REQUIRE FIRMS TO REPORT THE RATIO OF CEO PAY TO MEDIAN WORKER PAY
A Shorten Labor Government would promote fairness and tackle inequality in the workplace by requiring all listed firms with more than 250 employees to report the ratio of their CEO pay to the pay of the median employee.
The call for CEO pay transparency follows a report which found that the average total pay of ASX100 CEOs rose by 9 per cent last year - four times the speed of average wage growth. The median ASX100 CEO earned more than $4 million.
The best-paid Australian CEOs, Domino’s Don Meij, made $37 million last year. This was after a year in which the Fair Work Ombudsman publicly complained that Domino’s had failed to comply with requests to provide information into claims that Domino’s franchisees were paying workers as little as $10 an hour. Mr Meij made $10 every eight seconds.
This policy addresses public concern that CEO salaries are growing at an unfair rate and leaving workers behind. By extending current market reporting requirements for public companies, it will help inform investors as they calculate risks and decide where to invest their money.
This is a pro-growth reform and complements other transparency initiatives announced by Labor, including the public release of gender pay gaps within firms, our Tax Haven Transparency package, and the annual release of tax data for more large private firms.
The requirement for firms to report the ratio of CEO pay to median worker pay parallels measures introduced in the United States and Britain, with the latter championed by Conservative Prime Minister Teresa May.
Alongside their pay ratio, firms would be encouraged to provide a public explanation of the remuneration strategy.
The measure would apply from the 2021 financial year, to allow the Australian Securities and Investments Commission time to issue appropriate guidance, and for firms to comply with the new requirements.
Tackling inequality requires measures across the board, including in the boardroom.
Authorised by Noah Carroll ALP Canberra.