A new proposal would require listed companies with more than 250 employees to report how their chief executive’s pay compares to the median worker’s salary, should Labor win the next election.
Under the policy to be announced by shadow assistant treasurer Andrew Leigh on Tuesday, firms would be required to report pay ratios and encouraged to provide a public explanation of their remuneration strategy.
“This policy addresses public concern that CEO salaries are growing at an unfair rate and leaving workers behind,” 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.”
The latest proposal follows a consistent pattern of thought that sees Australian worker’s demanding greater transparency within workplace operations.
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. This figure includes equity and shares.
However Meij has insisted the figure is “factually incorrect”, as his reported pay was $4.66 million.
Meij has backed the move by Labor, telling the AFR, “Transparency is absolutely fantastic because it just tells the facts to shareholders, and then management and organisations are held accountability to facts.”
The survey found pay packets at Australia’s 100 biggest companies returned to pre-global financial crisis levels in 2017.
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.