Four in five bosses of the UK’s biggest companies still receive a higher rate of pension contributions than their employees despite a drive from investors to improve equality.
The median pension contribution rate for chief executives of the 100 largest companies on the London Stock Exchange is three times higher than for the average employee relative to their salaries, according to a report by LCP, a pensions consultancy.
The disparity narrowed in 2019 compared to 2018 as average contributions to chief executives’ retirement funds fell by a fifth, the Accounting for Pensions report found. Phil Cuddeford, a partner at LCP, said new guidelines on executive pensions were having an effect and that scrutiny is likely to intensify during the current crisis.
“With many workers seeing pay cuts or facing job insecurity, it will be increasingly difficult to justify the large divide between top executives and their employees,” he said.
But the figures show firms have work to do if they are to comply with guidance published by the Investment Association (IA) last year.
The IA said it will recommend that shareholders oppose their pay proposals if they fail to set a credible plan to bring bosses’ pension contributions in line with their workforce by the end of 2022.
Last week 36pc of Lloyds investors rejected its remuneration policy.