VIDEO: Deborah Hargreaves: Pay ratios are a useful exercise

Employers should consider the pay ratio between the top executive and the average employee, said Deborah Hargreaves, director at the High Pay Centre, in an interview with Debbie Lovewell, deputy editor of Employee Benefits.

She added: “I really think that’s a useful figure for them to look at.

“That is not to say that there’s one size fits all and that one ratio is suitable for all. But I do think it’s something [employers] should be looking at.

Top pay should be set in relation to what’s going on elsewhere in the [organisation].That is a remit that the remuneration committee has. It’s meant to set executive pay with a view to paying conditions elsewhere.

“A pay ratio is a useful exercise.”

Hargreaves participated in a panel debate at the Employee Benefits Summit in Alicante, Spain on 25 June around the future of executive pay and bonuses.