Methodology
Drawing attention to better practice on fair reward and spurring ambition to improve
The Fair Reward Framework (FRF) was developed in an asset-owner led process following consultation with stakeholders from the business and investment communities, academia and civil society. The FRF is designed as a holistic framework of how value creation is rewarded across a mix of different corporate stakeholders and is being piloted to address what was perceived as a gap in easy-to-access publicly available, comparable data. Feedback received during the consultation phase confirmed that there was an interest in a freely accessible tool that sythnesises and provides a level of comparability between the data provided in lengthy corporate disclosures. For a full list of indicators, why they were chosen and how they are assessed, please see our methodology document.
Data assessment process
All company assessments are based on publicly available information, compiled with input from the High Pay Centre acting as the FRF Secretariat and Minerva Analytics as a data partner. Companies are offered the chance to comment on draft assessments before they are published, however final editorial control is retained by the FRF Secretariat in consultation with the FRF Advisory Group. Any assessed company is invited to contact the FRF Secretariat if they would like to provide feedback on their assessment even after its publication. Companies also have the option of providing a short written response containing any additional context that they may wish to add for publication alongside the FRF assessment.
Intended use of the Fair Reward Framework
The FRF does not set out voting recommendations or suggested actions. Unlike some other analysis tools that are available only behind a paywall for professional investors, the tool is free to access. Stakeholders have the ability to interpret and use the data for their own purposes, which for investors may be for the purpose of informing year-round engagements with investee companies, for corporate advocates may be for the purpose of championing better practice within the company, and for academics, civil society and journalists may be a deep-dive into particular companies or industries of interest. We are interested to hear from users about how you apply the information available through the Fair Reward Framework, so the tool can be further developed.
Presentation of FRF data
Within Company Assessments you can view company assessments individually (by year or toggling between years: initially financial years 2022 and 2023 are available at launch) or by selecting the option of looking at 'comparison tables' that present a selection of indicators that can be viewed at the level of 'all companies' or by particular sectors.
The presence of a dash (–) on the website indicates that there is no data related to this metric: this may be because the company has not disclosed in line with this metric or because there is no action or change to note. The latest full dataset for all companies curemtly in scope, whcih have gone through the assessment and company-check process to date is available to download.
Dashboard Definitions
Indicators that appear within the dashboards are a selection of indicators from the overall FRF assessments that were identified through public consultation as being of particular interest to stakeholders. For the complete FRF assessment download the full data spreadsheet, which will be updated on a rolling basis as more companies are assessed and as additional reporting years are added. The full data sheet covers all 30 indicators and assesses 111 datapoints per company per year, the rationale for which are outlined in the FRF methodology.
The FRF Secretariat is interested to understand how users interact with this data and what additional or different ways to present it may be of interest to you. Please share your feedback.
KEY:
* denotes indicators that are included as part of individual company dashboards
+ denotes indicators that are included in the company comparison dashboard
Company characteristics
Assessed Report Publication Year*+: The calendar year in which the annual report was published by the company (which may be later than the year in which its financial year concluded)
Financial Year End*: Date of the company’s most recent financial year end (detailing the end of the year under assessment)
Market Capitalisation*: The value of the company’s market capitalisation at the end of the financial year assessed
Net Profit Margin*: The Company’s net profit margin for the year assessed, based on their Profit After Tax divided by their Revenue, or in the case of financial companies, Profit After Tax / Total Operating Income, akin to Net Interest Margin
CEO Tenure*: How many years they had been in post at the time of the annual report
Employee Count*: The number of employees reported
Reward scrutiny
Living Wage Accreditation*+: Whether the company is an accredited Real Living Wage employer in the UK
Living Wage*: (Calculation for Operating Regions): Whether the company commits to a local living wage for workers in other regions where it operates
Living Hours*: Whether the company is an accredited Living Hours employer in the UK
Tax Reporting (GRI 207)*+: Whether the company states that it discloses its management of tax practices in line with the Global Reporting Initiative's tax standard GRI 207
Remuneration Policies
RemCo Independence*: Whether the Remuneration Committee is 100% independent (based on the definition of independence set out in the UK Corporate Governance Code rather than the company’s own declaration)
RemCo Discretion Applied*+: Whether the company’s Remuneration Committee accepted the formulaic outcome of the company’s pay policy, or exercised their discretion, including to adjust the pay award in light of extraordinary contextual factors outside of the company’s control
RemCo Discretion Direction*: Whether discretion (if applicable) adjusted pay upward or downward
Director from Workforce*+: Whether the company has appointed a director from the workforce (one of three potential options set out in the UK Corporate Governance Code)
Trade Union Relations*+: Whether the company discloses the proportion of the workforce covered either by trade union membership or a collective bargaining agreement
Worker Consultation on Top Pay*+: Whether there is disclosure related to the wider workforce being consulted in a meaningful way as part of the executive pay setting process
80%+ Shareholder Support on Pay*+: Whether there was ‘significant’ levels of shareholder opposition (taken to mean a vote of more than 20% against the resolution) to a pay-related resolution at the company’s AGM over the previous three years
Reward Outcomes
CEO Total Pay*+: The ‘single total figure of remuneration’ (STFR) of total pay received for the year by the CEO (including all forms of incentive pay, share based awards, pensions and benefits) as disclosed in the company’s annual report
CEO Total Pay Change*+: The year-on-year change in CEO pay as measured using the single figure, expressed as a percentage increase/decrease
CEO Pay Ratio (to median employees)*+: CEO pay compared to the median employee within the company
Variable Remuneration Potential CEO Change*: The percentage point increase in the potential maximum pay-out of variable remuneration (STIP and LTIP) as a percentage of salary
Pension Award Parity*: Whether the company’s pension award to the CEO matches the employer contribution for the rest of the workforce
Pay of the Next Highest Exec:*: The pay of the next highest executive expressed as a percentage of the pay of the CEO 's total pay
Gender Pay Gap (mean data)*: The mean gender pay gap between male and female employees at the firm, as reported in the annual report
Gender Pay (women in top quartile)*+: The proportion of women in the highest paid quartile of UK employees from the relevant company
Ethnicity Pay Gap*: Whether the gap in total pay between minority ethnic workers and white workers across the company is disclosed
Total Dividend (USD)*: The total value of dividend payments made by the company