Disclosure focus
Disclosure 2-21 requires an organization to report two annual total compensation ratios and the contextual information necessary to understand the data and how it has been compiled.
First, the organization must report the ratio of the annual total compensation of its highest-paid individual to the median annual total compensation of all employees, excluding the highest-paid individual where that individual is part of the employee population.
Second, the organization must report the ratio of the percentage increase in annual total compensation of the highest-paid individual to the median percentage increase in annual total compensation of all employees, excluding the highest-paid individual where applicable. This second ratio is a mandatory element of Disclosure 2-21 and should not be treated as optional.
The highest-paid individual is not necessarily an employee. The numerator should include the individual who received the highest annual total compensation from the organization during the reporting period. The denominator covers all employees reported under Disclosure 2-7 for the entities included in the organization’s sustainability reporting under Disclosure 2-2. Workers who are not employees are not included in the denominator.
Annual total compensation includes salary, bonus, stock awards, option awards, non-equity incentive plan compensation, changes in pension value and nonqualified deferred compensation earnings provided during the year. Depending on the organization’s remuneration policies and data availability, the calculation should consider base salary, total cash compensation and direct compensation, including the fair value of annual long-term incentives.
The organization should use a consistent compensation definition and valuation basis for the highest-paid individual and the employee population. It should explain the treatment of equity awards, deferred remuneration, pension-value changes, benefits, part-time employees, part-year employees and currency translation.
For the second ratio, the organization should distinguish the median of employee-level percentage increases from the percentage change in the median compensation amount. The calculation methodology and treatment of employees without comparable prior-period data should be documented and explained.
The contextual information should state:
1. whether any employees reported under Disclosure 2-7 were excluded;2. whether full-time-equivalent pay rates were used for part-time employees;3. the types of compensation included;4. the title of the highest-paid individual.
Additional context can explain the effects of organizational size, sector, employment strategy, outsourced or part-time work, automation, workforce mix, one-off remuneration, currency volatility, methodology changes and improvements in data collection.
Where the highest-paid individual changes between periods, the organization should not combine the compensation of different role-holders. It should identify the individual with the highest annual total compensation in the current reporting period and explain how the percentage-increase calculation was handled where comparable prior-period compensation was unavailable.
Where the median percentage increase is zero, the second ratio is mathematically undefined. Where percentage changes are negative, the organization should report the underlying changes and explain how the resulting ratio should be interpreted.
The two results should be presented as ratios, for example 20:1 and 2.5:1, rather than as percentages unless a percentage is being shown as an underlying calculation input.
Reasons for omission are permitted for Disclosure 2-21. Where required data are unavailable or incomplete, the organization must identify the affected requirement, specify the missing employee populations or entities, explain why the information is unavailable, and describe the steps and expected time frame for obtaining it in its GRI content index.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official GRI source.
Before you start
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key information to prepare
| Preparation field | What to capture | Evidence hint | Owner |
|---|---|---|---|
| Annual total compensation ratio | Calculate the highest-paid individual's annual total compensation divided by the median for all employees reported under GRI 2-7, excluding that individual only where applicable. | Dated source records, governance papers and approval evidence supporting annual total compensation ratio. | People / Remuneration / Finance |
| Percentage-increase ratio | Calculate the highest-paid individual's percentage increase divided by the median of employee-level percentage increases. | Dated source records, governance papers and approval evidence supporting percentage-increase ratio. | People / Remuneration / Finance |
| Method and contextual information | Report exclusions, FTE treatment, compensation types, title of the highest-paid individual and other context needed to understand the ratios. | Dated source records, governance papers and approval evidence supporting method and contextual information. | People / Remuneration / Finance |
How to prepare it
Request the data
Request the disclosure evidence
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
Provide employee-level current and prior-period annual total compensation, the highest-paid individual's data and title, population reconciliation, compensation components, FTE and currency treatment, and methodology for both ratios.
Use the organisation's own role and document names, but preserve the defined GRI terms and the scope described above.
Better request
Provide employee-level current and prior-period annual total compensation, the highest-paid individual's data and title, population reconciliation, compensation components, FTE and currency treatment, and methodology for both ratios.
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Use a consistent compensation definition and distinguish the median of employee-level percentage increases from the percentage change in median compensation.
Context note
Explain exclusions, zero or negative median increases, changes in the highest-paid individual, methodology changes and material data limitations.
Fluctuation statement
Explain significant changes in either ratio, including compensation, population, policy, methodology, inclusion, currency and data-collection effects.
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Preparation tools & forms
Professional preparation tools for GRI 2-21 — free with verified email access. Enter the code we send you once and use downloads, report links and the Knowledge Hub AI Assistant for 24 hours.
Assurance readiness
For each claim, check the evidence
| Claim | Risk | Evidence to check |
|---|---|---|
| Annual total compensation ratio is reported accurately and completely. | The response omits, misclassifies or overstates annual total compensation ratio. | Dated source records, governance papers and approval evidence supporting annual total compensation ratio. |
| Percentage-increase ratio is reported accurately and completely. | The response omits, misclassifies or overstates percentage-increase ratio. | Dated source records, governance papers and approval evidence supporting percentage-increase ratio. |
| Method and contextual information is reported accurately and completely. | The response omits, misclassifies or overstates method and contextual information. | Dated source records, governance papers and approval evidence supporting method and contextual information. |
Evidence pack to prepare
Common reporting gaps
Company reports
How companies report GRI 2-21 in practice
Examples of full and partial reporting practice. These are evidence-led reviews, not exact disclosure templates to copy.
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Advice, not assurance
Framework references
Relevant GRI requirements and related disclosures
Available framework references and nearby disclosures relevant to preparing this requirement.
GRI
GRI 2-21
within GRI 2: General Disclosures
Guides that settle this question
Related & explore
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Go deeper · GRI 2-21
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