U.K. pension funds with combined assets of more than £100 billion ($131.3 billion) have launched the Fair Reward Framework, a tool intended to inform investors’ stewardship activities and employee pay, according to a news release.
The asset owners include the £3.3 billion Church of England Pensions Board, London; the £38 billion Brunel Pension Partnership, Bristol, England; the £25 billion People’s Partnership, Crawley, England; the £36 billion National Employment Savings Trust, London; and the £34 billion Railways Pension Scheme, London.
Assessments for 65 U.K.-listed companies will be immediately available, with full FTSE 100 data expected by early 2025. There are also future plans to include expanding to companies in other markets, such as the U.S..
Companies to be assessed under the framework include BP, Shell, HSBC, Legal & General, AstraZeneca and BAE Systems. Metrics covered include living wage commitments, remuneration committees and any gender or ethnicity pay gaps.
Initial results include that, from the firms assessed, median CEO pay stands at £4.1 million, with awards ranging from under £1 million to £17 million. Additionally, 57% of the companies analyzed were accredited U.K. Living Wage employers, and only 22% of companies disclosed trade union membership coverage.
Clare Richards, director of social factors at the Church of England Pensions Board, said: “We need to reset the debate on corporate pay to be based upon a broader understanding of a company’s approach across the whole firm. As a fund we will be using insights from the Fair Reward Framework to inform our voting decisions at company AGMs, as well as engagement with company remuneration committees.”
The tool was built in partnership with the High Pay Centre, a think tank focused on the causes and consequences of economic inequality.
The development of the tool comes in the same week the U.K.’s Financial Conduct Authority discontinued its work on developing a metric measuring the effectiveness of stewardship by an active investor, claiming issues relating to complexity.
