Labor to force companies to expose CEO pay gaps

WANT to know how much the boss is earning? Companies will be forced to reveal what they pay their top bosses compared to the average worker under a future Labor government.

LABOR will force Australian companies to reveal how much their chief executive is paid compared to the average worker if they win government.

The new policy to expose the CEO pay gap will be announced today by shadow assistant treasurer Andrew Leigh.

“This policy addresses public concern that CEO salaries are growing at an unfair rate and leaving workers behind,” Dr Leigh said.

“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.”

Under the policy, listed companies with more than 250 employees would have to report the pay ratio between how much their chief executive earns compared to the median worker’s salary.

It’s similar to Labor’s policy to force companies to publicly reveal how much they pay men compared to women.

Opposition leader Bill Shorten with Shadow Assistant Treasurer Andrew Leigh. Picture: Michael Masters/Getty Images

CEOs at the nation’s 100 biggest ASX-listed companies took home an average $6.2 million of “realised pay” in 2017, according to Australian Council of Superannuation Investors figures released in July.

Domino’s Pizza CEO Don Meij topped the list of the highest-paid CEOs, with a realised pay of $36.84 million.

Dr Leigh said the CEO pay ratio reporting would mirror measures introduced in the United States and Britain.

In July, then prime minister Malcolm Turnbull said shareholders increasingly objected to high CEO pay.

He said more investors had used their ability to reject remuneration packages, backing their rights as activists.

If Labor wins the next election, it plans to put the reporting regime in place from the 2021 financial year to allow companies to comply with the new requirements.