TUC guidelines on Executive Pay

The Trade Union Share Ownership group

The group has been formed to help influence those companies where the unions have a financial interest and is an amalgam of the TUC, UNISON and Unite unions. This is initially focussed on FTSE 350 employers.

Influencing Directors’ Pay

The TUC press release stated that the three organisations “will start out with over £1bn of assets between them and the TUC hopes that many more of its affiliated unions will want to get involved in the coming year, as they see this new, co-ordinated approach as an effective way of getting workers' voices heard in company boardrooms.”

Policy positions on executive pay

The guidelines document sets out number of policy positions including:

• To limit the gap in the pay between those at the very top and bottom of companies;
• Directors’ pay increases to mirror those of the rest of the workforce;
• Persuading all companies to become living wage employers
• Encouraging the inclusion of worker representatives in their corporate governance structures;
• At least a quarter of the board positions to be held by women;
• All board vacancies to be advertised, rather than people simply being invited to join; and
• A limit to the number of board positions that directors can hold. Where individuals are unable to devote enough time to their role their re-election should be opposed.

Executive pay benchmarking

Their “best practice policy” includes reference to the use remuneration consultants. This is and area that is obviously of particular interest to executive benchmarking providers such as Paydata.

Remuneration committees