Five years have now passed since UK-listed companies were first required to publish the ratio of CEO pay to that of workers at the 25th percentile (lower quartile), median, and 75th percentile (upper quartile) of their UK workforce. The aim was to increase transparency around how large employers distribute reward and to prompt a more informed discussion about fair pay policies.

Today, with living standards under pressure and scrutiny of corporate behaviour intensifying, how companies allocate their pay budgets is more important than ever. The High Pay Centre’s latest analysis of FTSE 350 disclosures offers timely insights—and highlights opportunities to build on what the current rules have achieved.

Who feels the pain?

The headline figures from 2023-24 showed that CEO-to-worker pay gaps remained extremely wide—especially when viewed from the bottom of the pay scale. In the FTSE 350, the median CEO was paid 52 times more than their median UK employee, and 71 times more than a worker at the lower quartile. In the FTSE 100, those ratios rose to 78:1 (median) and 106:1 (lower quartile). Around 18% of FTSE 350 companies reported a CEO-to-median ratio above 100:1, and 5% exceeded 200:1. For lower-quartile workers, 28% of companies exceeded 100:1, and 9% reported ratios above 200:1.

Outliers illustrate the trend: at Mitie, the CEO earned 575 times the median employee; at Tesco, the figure was 431:1. These aren’t anomalies—they reflect broader structural pay patterns across large UK employers.

By contrast, the gap between lower, median, and upper-quartile employee pay tends to be relatively modest (often a factor of two).

What stands out is just how sharply CEO pay diverges from the rest of the workforce—a pattern that raises important questions about reward structures and organisational fairness.

Wider consequences

How major employers distribute pay is a key determinant of household incomes and economic inequality. For most UK adults, employment income is their primary or only source of earnings. When the lion’s share of corporate reward flows to a small group at the top, the consequences extend well beyond the company itself.

Pay ratios offer a useful diagnostic. They provide a snapshot of how inclusive or unequal a firm’s pay practices are—and whether financial gains are being shared across the workforce or concentrated at the top. These insights can inform conversations around company culture, retention strategies, and the long-term sustainability of pay structures.

High and persistent gaps may damage morale, increase turnover, and erode trust among employees. They can also invite scrutiny from investors, regulators and the public—particularly when generous executive pay sits alongside poor performance or wage stagnation elsewhere in the business.

Despite the value of the disclosures, there are clear weaknesses in the current approach. Most significantly, pay ratios only cover directly employed UK staff, excluding large numbers of indirectly employed or outsourced workers—roles that are often among the lowest paid. This omission can obscure the true scale of inequality in companies that outsource frontline services.

The three data points disclosed (25th, 50th, 75th percentile) offer only a partial view. Two companies may report similar ratios but have very different internal pay structures, depending on how pay is distributed across departments, regions or job types. Meanwhile, the quality and clarity of disclosures vary significantly. Some firms offer helpful context and explain their methodology in detail. Others stick rigidly to the minimum required, limiting the value of the data for stakeholders trying to draw meaningful comparisons.

Reform recommendations

There’s a growing case for modest but meaningful reforms. The High Pay Centre’s report outlines three practical recommendations: include outsourced and indirectly employed workers in ratio calculations to better reflect the full workforce; extend the reporting requirement to large private companies, which are also major employers; and encourage greater transparency on overall pay expenditure and how it is distributed across the organisation.

Mandatory pay ratio reporting has brought greater transparency to corporate pay and opened up new conversations about fairness, value, and accountability. But the disclosures themselves are only the starting point. The real impact depends on how companies use this data—and how boards respond.

Without greater transparency, there’s a risk that extreme gaps in pay persist without scrutiny—undermining trust in business and accountability to the wider public.

Andrew Speke is head of communications at the High Pay Centre.