Teresa May's plans to require businesses to publish pay ratios showing the difference in earnings between the chief executive of a business and the average company worker have come under fire, with warnings that the calculations could produce anomalies.
Critics of the PM's proposals have expressed concern that pay ratios fail to take into account the complexity of a business or the sector in which it operates. This could result in big banks (which tend to have a large number of well paid staff) appearing to be fairer than, for example, retail organisations that employ a huge number of lower-paid sales staff.
Of course one could argue that while the proposed calculations will inevitably produce some anomalies, the introduction of pay ratios will ultimately provide a yardstick for pay comparisons between organisations within the same sector and competitors.
The Prime Minister will say that she wants to ensure that "everybody plays by the same rules" as she unveils plans to make firms publish "pay ratios" revealing how much more executives get than average workers.