Institutional investors eager to take on pay at the top have so far been silent on pay at the other end – but low pay is moving up pension funds’ governance agendas.
Pay differentials have sneaked their way into the current UK political debate via bosses’ pay. Under orders from the government, Britain’s business ministry is currently conducting a review of corporate governance that will include executive pay disclosure. Meanwhile, a thinktank, the New Economics Foundation, is demanding that pay ratios appear on the front of companies’ annual reports.
The £5.1bn (€5.8bn) Merseyside local authority pension scheme in April went public on the pay issue, announcing that it would vote against excessive remuneration deals in the hope of setting a precedent for other investors.
But the concomitant of excessive remuneration – low pay – has hardly been the target of investor scrutiny. In contrast to underpaid unskilled work at the bottom, execu…