With the April 4 reporting deadline for the UK’s inaugural gender pay disclosure nearly here, members of the Parliament’s Business, Energy, and Industrial Strategy Committee (BEIS) have pledged to thoroughly examine how companies are complying with the rules while also announcing an official inquiry on simplifying executive compensation in the name of fairness. Additionally, the Equality and Human Rights Commission (the “EHRC”), the entity expected to enforce the gender equity reporting requirements, has promised to take steps to enforce reporting, including court orders and fines.
Earlier this month, the Center reported on some major concerns with the highly anticipated UK gender pay reporting deadline, including an inability of UK regulators to verify the data submissions or even determine which companies are required to provide submissions. Given the reported problems with the gender pay data submission process, it is not surprising that both Parliament and UK regulators are pledging to vigorously enforce the reporting requirement. The launching of an official inquiry by the BEIS Committee on executive compensation and the simplification of pay in order to address income inequality follows the announcement last fall by Prime Minister Theresa May to address executive compensation. According to the BEIS Committee statement announcing the inquiry, “[u]njustified executive pay awards are the most corrosive influence on public trust in business and businesses must face up to their responsibilities and tackle this problem. If businesses don't step up on executive pay, Government will need to step in.” Specifically, the Inquiry will examine the UK’s more stringent executive pay reporting requirements, the gender pay reporting data, and the “progress in simplifying the structure of executive pay and pay reporting, and the role of remuneration committees, institutional investors and shareholders in curbing excessive pay”. The Committee has solicited public input on the topics of the investigation, including specific steps companies have taken to improve executive pay over the last 12 months.