ESRS Standard
ESRS Standard
40. The objective of this DR is to enable an understanding of the gap in pay between women and men amongst the undertaking's employees and of the level of remuneration inequality within the undertaking.
41. The undertaking shall disclose:
(a) the gender pay gap defined as the difference in average pay levels between female and male employees, expressed as a percentage of the average pay level of male employees; and
(b) the annual total remuneration ratio of the highest-paid individual to the median annual total remuneration for all employees (excluding the highest-paid individual).
Application Requirements (AR)
Application Requirements (AR)
AR 31 for para. 41(a) (Calculation of gender pay gap)
The gender pay gap disclosure in accordance with paragraph 41(a) shall include all male and female employees’ gross hourly pay level and be calculated as follows:
(Average gross hourly pay level of male employees − average gross hourly pay level of female employees) ÷ (Average gross hourly pay level of male employees) × 100
AR 32 for para. 41(a) (Calculation of gender pay gap)
When compiling the information required by paragraph 41(a), the undertaking shall:
(a) include all male and female employees;
(b) include the ordinary basic salary; and
(c) include any other remuneration made available to all employees, whether in cash or in-kind, which the employee receives directly or indirectly (complementary or variable components) in respect of his/her employment from his/her employer.
AR 33 for para. 41(a) (Unadjusted gender pay gap)
Paragraph 41(a) requires a disclosure of the unadjusted gender pay gap, which measures the overall difference in average pay between male and female employees but does not account for specific factors that can further explain these differences in pay. The adjusted gender pay gap by employee category and/or broken down by country may provide additional contextual information that complements the unadjusted gender pay gap.
AR 34 for para. 41(a)(b) (Methodological context information)
In accordance with ESRS 2 GDR-M, the undertaking shall disclose the methodology it used for compiling the data and/or how the data has been compiled.
AR 35 for para. 41(b) (Annual total remuneration calculation)
When compiling the information required by paragraph 41(b), the undertaking shall:
(a) include all employees;
(b) include base salary, which is the sum of guaranteed, short-term and non-variable cash compensation;
(c) include, depending on the undertaking's remuneration policies, all of the following:
i. benefits in cash, such as cash allowances, bonuses, commissions, cash profit-sharing and other forms of variable cash payments;
ii. benefits in-kind, such as cars, private health insurance, life insurance and wellness programs; and
iii. total fair value of all annual long-term incentives (for example, stock option awards, restricted stock shares or units, performance stock shares or units, phantom stock shares, stock appreciation rights and long-term cash awards);
(d) apply the following formula for the annual total remuneration ratio:
annual total remuneration ratio = annual total remuneration for the undertaking's highest-paid individual ÷ median employee annual total remuneration (excluding the highest-paid individual)
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