Disclosure focus
This disclosure asks an organisation to explain how the pay of its highest-paid individual compares with the pay of its wider workforce over the reporting period. In practice, it is about showing the ratio in a way that helps readers understand the scale of pay differences inside the organisation, rather than just giving a single headline figure without context.
The practical focus is on the scope and consistency of the comparison: which employees are included, whether the organisation is looking across all operations or only part of the business, and how the comparison is made from one period to the next. The aim is to make the ratio understandable and comparable, so the reporting should be clear about the basis used and any limits in coverage.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official GRI source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key datapoints to prepare
＋ Show GRI 2-21 sub-elements (LRA working checklist)
Give the context needed to interpret the figures, and explain how the numbers were put together.
State the ratio between the top earner’s yearly total pay and the median yearly total pay across all other staff.
State the ratio between the top earner’s year-on-year pay rise and the median year-on-year pay rise across all other staff.
How to prepare it
1Set the reporting boundary first: confirm which entity or group the pay comparison covers, and make sure the same boundary is used for both the pay level ratio and the pay-rise ratio.
2Define the comparison groups in plain terms: identify the one person at the top of the pay scale, then establish the employee population used to calculate the median, leaving that top-paid person out of the employee set for the median calculation.
3Gather the underlying payroll evidence: collect annual total pay figures for the top-paid individual and for all other employees in scope, plus the year-on-year pay change data needed to work out the percentage increase comparison.
4Calculate the two outputs separately: work out the ratio between the top-paid individual’s annual total pay and the median annual total pay of the employee group, then work out the ratio between the top-paid individual’s pay increase percentage and the median pay increase percentage for the rest of the workforce.
5Write the supporting explanation alongside the numbers: include any context needed to make the figures understandable, and explain the method used to compile them, including any exclusions, adjustments, assumptions, or changes from the prior period that affect comparability.
6Check the final disclosure against the source requirement: confirm both ratios are shown clearly, the narrative support is complete, and the wording matches the official source in substance even though your presentation is in your own words.
Request the data
Request the pay comparison data from People Analytics
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What is the pay comparison between the top earner and the rest of the workforce, and what context is needed to explain how it was built?
Use your organisation’s own pay and workforce terms first, then map them to the reporting disclosure. Keep the ask in the language your payroll, reward, or people analytics team already uses, and check the source material before sign-off.
Weak request
Please provide the GRI 2-21 annual total compensation ratio and the related contextual information.
Why it fails: This uses framework language only, so the owner still has to interpret what to pull, from which system, for which employee set, and how to explain the calculation. It is too easy to return a partial or inconsistent extract.
Better request
Please send the pay comparison pack for [reporting period]: the top earner’s annual pay, the median annual pay for everyone else, the year-on-year change figures for both, and a short note on scope, method, exclusions, and source systems. Use your normal payroll and reward terms, then add a mapping note if needed.
Industry examples
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
Explain the basis used to identify the top-paid person and the employee median, how annual total pay was defined for each group, and any exclusions, adjustments or estimation steps used to compile the figures.
Context note
Set out what the two ratios indicate about the relationship between the organisation’s most highly rewarded individual and the typical employee, and note any features of the workforce or pay structure that help readers interpret the numbers.
Fluctuation statement
If either ratio moved materially, describe the main drivers, such as changes in the top individual’s pay, shifts in the employee median, workforce mix, bonus timing or one-off items, using the same calculation basis as the reported figures.
Content index entry
GRI 2-21 Annual total compensation ratio — [location / page] / [notes]
Download Centre
Preparation tools & forms
Professional preparation tools for GRI 2-21 — free with an LRA Community membership. Register once (it's free) and every download unlocks, together with the Disclosure Library, templates and the LRA AI-assistant.
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
A percentage is stated without the underlying counts (numerator and denominator).The denominator — what the figure is a share of — is not explained.Partial scope is reported as if it were complete coverage.One-off activities are counted as if they were ongoing programmes.Boundary or period changes that move the figure are not flagged.Exclusions from the reported scope are not listed or explained.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner
The request goes to payroll, finance or HR without naming the person who can pull the pay data and explain how the figures were built.
Framework language only
The team asks for the metric using reporting jargon instead of the organisation’s own pay and reward terms, so the source team cannot map it to their records.
No boundary set
No one states which legal entities, employee groups or pay elements are in scope, so different teams collect different populations.
Wrong time basis
The data is pulled for the wrong pay year or a mismatched cut-off date, so the annual figures do not line up with the period being reported.
Mixed counting basis
One part of the file uses headcount while another uses full-time equivalent or another basis, which makes the ratio impossible to reconcile.
Source labels lost
Original file names, column headings and system field names are stripped out during consolidation, so the team cannot trace each number back to its source.
Populations merged
The highest-paid person and the rest of the workforce are blended into one extract, which hides the separate median calculation needed for the ratio.
Evidence trail missing
The working papers do not keep the source extract, calculation notes and reviewer sign-off together, so the final numbers cannot be checked later.
Context not captured
The team records the ratio but forgets the notes that explain how the data was compiled, leaving the disclosure without the background needed to interpret it.
Where judgement is often needed
Set the group boundary after buy-ins and sell-offs
If the year includes a purchase, sale, or other change in the business perimeter, state which people were kept in the pay set for the year and explain the cut-off you used so readers can see why the comparison is fair.
Choose one pay basis and keep it consistent
Decide whether the comparison uses pay earned, paid, or another annual total measure, apply that basis across the whole calculation, and explain the choice in the context note.
Handle country pay rules by translating them into one group method
Where local pay practices differ across countries, convert them into a single group-wide approach for the ratio and describe any country-specific adjustments or exclusions you made.
Explain who sits just inside or outside the employee set
If some workers are close to the boundary, such as part-year staff, agency workers, secondees, or other atypical arrangements, say whether they were included and why.
Use estimates only where direct figures are not available
When exact pay data cannot be obtained for everyone in scope, use a clear estimation method, say which figures were estimated, and explain how that affects the ratio.
State how you treated the top earner if their pay changed mid-year
If the highest-paid person changed during the year or their role moved, explain which person you treated as the top earner for the calculation and how you handled any overlap.
Be explicit about the comparison period for pay growth
For the pay-increase measure, state the year-on-year period you used, how you matched employees across the two points in time, and whether anyone was left out because a clean comparison was not possible.
Round in a way that does not distort the result
If rounding changes the displayed ratio or percentage, say the rounding rule used and keep enough precision in the working papers to show the underlying calculation.
Aggregate enough to protect personal data
Where the pay set is small or sensitive, combine or mask detail as needed to avoid identifying individuals, and explain any aggregation that affects how the ratio is read.
Explain any restatements when the workforce mix changes
If prior-year figures were recalculated because the employee population changed, describe what was updated, why it changed, and how the revised numbers affect the current ratio.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — manufacturing
We set out the pay gap between our top earner and the middle employee pay level, using annual total pay for staff other than the top earner. We also show how the top earner’s year-on-year pay movement compares with the middle movement across the rest of the workforce, and explain the basis used for the calculations.
Synthetic illustration only. The figures are internally consistent and are meant to show how a reporter could present the required pay comparison and the method used.
Illustrative (synthetic) example — retail
We present the relationship between our highest-paid colleague’s annual pay and the median annual pay of everyone else, excluding that individual. We also compare the percentage change in that person’s annual pay with the median percentage change for the rest of the workforce, and note the calculation approach and scope.
Synthetic illustration only. The numbers are internally consistent and designed to demonstrate a second plausible presentation in a different sector.
How companies report GRI 2-21
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
Cogna Educação S.A.
Education Services · Brazil · 2024
Cogna Educação S.A.'s 2024 report provides a specific annual total compensation ratio of 136 on page 153 and details that 23.08% of senior management positions are held by women on page 147. The report also discusses climate-related impacts over various time horizons on page 161. However, it is unclear whether the report includes a comprehensive gender pay gap analysis or detailed policy descriptions beyond these points.
China Steel Corporation
Mining — Iron, Aluminum, Other Metals · Taiwan · 2024
China Steel Corporation’s Sustainability Report 2024 provides a covered datapoint on the annual total compensation ratio, reported on page 79. The report also includes employee percentage data by gender on page 43. However, there is no clear narrative or methodology explanation found for certain narrative items, as no quotable evidence was identified for these aspects.
CAE Inc.
Aerospace and Defense · Canada · 2024
CAE Inc.'s FY24 Global Annual Activity and Sustainability Report provides a clear figure for the total number of employees, specifying that this count includes only permanent employees, with 5 employees not identifying as women (p.158). The report also states that 100% of all employees and workers who are not employees are covered in relevant business processes (p.175). However, there is no clear narrative or methodological explanation found regarding these figures or related disclosures.
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Scenarios to work through
A group has one executive whose annual package is £1,200,000. The rest of the workforce has a median annual package of £48,000 once that executive is left out of the employee set.
QHow should the pay comparison be presented for the year, and what should be left out of the employee median calculation?
Reveal model answer →Hide answer ↑State the comparison as 25:1, because £1,200,000 divided by £48,000 equals 25. When finding the workforce median, exclude the top earner from the employee population used for that figure. If there are any unusual pay elements, pay periods, or workforce scope choices that affect the result, explain them in the supporting context.
Why this matters · Use the top earner’s annual pay against the median for everyone else, and explain any calculation choices that affect the figure.
In the current year, the top earner’s annual pay rose from £900,000 to £990,000, while the median employee pay rose from £45,000 to £46,800. The pay team is unsure whether to show the raw pay movement or the relative change.
QWhat comparison should be reported for the year-on-year movement, and how is it worked out?
Reveal model answer →Hide answer ↑Report the comparison between the top earner’s percentage pay rise and the median percentage pay rise for the rest of the workforce. Here, the top earner increased by 10.0% and the median employee increase was 4.0%, so the comparison is 2.5:1. Present the result as a ratio and make clear how the percentage changes were calculated if the method needs context.
Why this matters · For pay movement, compare percentage increases, not cash amounts.
A preparer has the ratio figures ready, but the payroll data covers only permanent staff in the main operating company, while contractors and a newly acquired subsidiary were left out. The team also used a different cut-off date for the executive than for the rest of the workforce.
QWhat extra explanation should accompany the figures so a reader can understand how they were built?
Reveal model answer →Hide answer ↑Add a plain explanation of the population covered, who was left out, the date or period used for each calculation, and any other choices that affect comparability. The aim is to let a reader understand both the numbers and the way they were assembled, so the context should cover scope, timing, and any material estimation or data-quality points.
Why this matters · Always pair the ratio with enough context to show who was counted and how the numbers were assembled.
The finance team can calculate the pay ratio, but the board pack also includes a note saying the company uses a bonus-heavy pay structure and that one employee was on long-term leave during the year. The draft disclosure currently gives only the ratio figures.
QShould those background facts be added, and if so, why?
Reveal model answer →Hide answer ↑Yes. Include any background that helps a reader interpret the figures and understand the compilation method, such as pay mix, leave status, or other factors that materially affect the result. The disclosure is not just the ratio itself; it also needs the surrounding explanation that makes the data intelligible.
Why this matters · If a factor changes how the figures should be read, explain it alongside the ratio.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
Primary
Related & explore
Organizational details → Guide ✓Nomination and selection of the highest governance body → Guide ✓Chair of the highest governance body → Guide ✓Role of the highest governance body in overseeing the management of impacts → Guide ✓Delegation of responsibility for managing impacts → Guide ✓Role of the highest governance body in sustainability reporting → Guide ✓Show all 29 related disclosures →
FAQ
Questions this page answers
For GRI 2-21, what data do I need to collect before I start drafting the disclosure?+−
The page says to prepare three datapoints: pay ratio to median, pay rise ratio, and a method-and-context note. Use those as the starting point for your data request and drafting plan.
How do I use the step-by-step preparation section for GRI 2-21 in practice?+−
Use it as a working checklist to move from data gathering to a draft disclosure. The page is designed to help you prepare the disclosure, set scope and methodology, and get to an assurance-ready position.
Who should own the GRI 2-21 data collection in my organisation?+−
The page is aimed at sustainability/ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the person or team that can source the pay data and explain the method. The page does not assign a fixed owner, so you should align this internally.
What should I include in the method and context note for GRI 2-21?+−
The page flags a method-and-context note as one of the datapoints to prepare, so the note should explain how the figures were put together and the context needed to read them. Keep it tied to the data you actually report and to the scope you have chosen.
What evidence should I keep for GRI 2-21 if I want to be assurance-ready?+−
The page includes an evidence pack with five items and four assurance claims to verify, each with a claim, risk and evidence prompt. Use those materials to build a file that shows how the numbers were prepared and checked.
What are the four assurance claims in the GRI 2-21 page and how do I use them?+−
The page says there are four assurance claims to verify, each linked to a risk and evidence. Use them as a review checklist so you can test whether the disclosure is supported before it is finalised.
What are the common mistakes people make when reporting GRI 2-21?+−
The page lists common reporting gaps and mistakes, so it is useful for a pre-submission check. Use it to spot missing context, weak methodology, or incomplete support before you turn the data into a draft.
How do I turn the GRI 2-21 data into a draft disclosure?+−
The page has a draft-output section with visualisation ideas, narrative starters and a GRI content-index line. Use those to turn your prepared data and method note into a first draft that is easier to review.
How should I use the synthetic example disclosure on the GRI 2-21 page?+−
The example is explicitly synthetic, so treat it as a format guide rather than a model to copy. Use it to see how the quantitative table and narrative can be presented consistently.
What is in the GRI 2-21 download centre and how can it help me?+−
The download centre includes a Prep & Assurance workbook in .xlsx format and a printable Library Card in .pdf format. Use the workbook to organise preparation and assurance checks, and the PDF as a quick reference.
Can I use the 'From company reports' table to find real examples of GRI 2-21 disclosures?+−
Yes. The page says the table links to real published reports at the pages where the topic is disclosed, which can help you see how others have presented the topic in practice.
More questions this page can help with
GRI 2-21 pay ratio to median: what should I ask HR for?GRI 2-21 pay rise ratio: how do I collect the underlying data?GRI 2-21 method and context note: what level of detail is enough?GRI 2-21 assurance evidence pack: what documents should I put in it?GRI 2-21 common reporting gaps: what should I check before sign-off?GRI 2-21 workbook: how do I use the .xlsx file to prepare the disclosure?GRI 2-21 library card PDF: what is it for and who should use it?GRI 2-21 draft output: how do I write the narrative starter from the data?GRI 2-21 visualisation ideas: what charts or tables does the page suggest?GRI 2-21 content index line: how do I draft the index entry?GRI 2-21 from company reports: how do I use the linked examples without copying them?GRI 2-21 no ESRS or IFRS equivalent: what does that mean for my reporting workflow?
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