Changes to Ecology’s fair pay policy27 March 2017
Ecology has a long standing commitment to the principles of fairness and transparency for remuneration. Our approach is to reward our staff in line with their experience, expertise and overall contribution to the Society as well as the general marketplace. We’re an accredited Living Wage employer and have been awarded the Pay Compare Mark which recognises our transparent approach to remuneration by publishing our actual pay ratio.
At our last AGM we informed members that we would review how we set Executive remuneration including our long standing commitment to a ‘fair pay’ policy that no basic salary will exceed a limit of five times the lowest full grade available. This reflected concerns that the level set for this maximum pay limit could impact on our ability to recruit staff with the appropriate skills and experience that we require in order to continue growing in an increasingly complex regulatory environment such as the implementation of the new Senior Managers’ Regime.
Our review looked at a range of considerations including ethical pay best practice and benchmarking against similar organisations, which included external advice from HR specialists with extensive experience of working with the co-operative and mutual sector. We concluded that a revised maximum pay limit of eight times would, over time, allow Ecology to attract staff with the skills and experience sufficient to support our requirements, whilst still ensuring that we are aligned to best ethical practice.
As a mutual, we asked our member Ethics Panel to consider the change to the pay limit, which they supported. All those who responded also confirmed they wanted Ecology to continue to adhere to both the principles of fairness and transparency and that we maintain a maximum pay limit policy.
At our next AGM, on 29 April 2017, as in previous years, our members will be given the opportunity to vote on the Society’s remuneration report which sets out our approach to remuneration and will include details of the change to the maximum pay limit.
While Ecology has pioneered an open and transparent approach to fair pay and has led the way on pay ratios for many years, there is a growing wider interest in the issue. We welcomed the Government’s outline proposals, in last year’s Green Paper on Corporate Governance, for companies to publish pay ratios and our new pay limit remains below the limits proposed by the Green Party, which has campaigned for a 10:1 ratio, and the TUC which supports an aspirational goal of a 20:1 maximum pay ratio.
Following the change to the remuneration policy, Steve Round, Chair of Ecology Building Society explained,
“We’re proud of our long standing commitment to fair pay and our consultation with our member Ethics Panel confirmed this remains important for our members too. The changes to our remuneration policy will help ensure we are ‘future proofed’ in an increasingly complex regulatory environment while retaining our ethical commitments.”