Pay transparency is going mainstream, with governments around the world introducing legislation requiring businesses to be more open about how they pay and incentivize their people. In this article, we hear from one industry expert on where we are now, where we go from here, and the implications for employee equity compensation strategies.
As more rules on pay transparency are introduced across the United States, Europe, and beyond, the business community finds itself needing to face up to a new reality of openness on compensation and how to cope with the complexities that can arise, particularly for companies operating in multiple jurisdictions, where different standards may be in place.
Pay transparency specialist Nancy Romanyshyn, Senior Director, Total Rewards Strategy and Solutions, with Seattle-based analytics software company Syndio, was a guest on the most recent episode of our Prosperity at Work podcast, during the course of which she took part in a wide- ranging discussion with regular show hosts, J.P. Morgan Workplace Solutions’ own Chris Dohrmann, Executive Director, Strategic Partnerships, and Lauren Jenkins, VP, Head of Executive Participant Servicing.
At the outset, when asked to define pay transparency, Nancy made a point of stressing that it is a broader topic than people sometimes initially assume.
“There’s so much more to it than just posting salary ranges when you’re advertising a job. We’re finding that the legislation is also looking at other components of compensation. It’s also about being transparent around how people are advancing in your organization, and showing the opportunities for advancement,” she said.
On the ongoing legislative changes taking place in the pay transparency space and the need for companies to recognize and embrace these new and evolving requirements, Nancy said that companies need to adopt a proactive approach and many are doing exactly that.
“Companies are developing a strategy. Compensation professionals are saying to leadership that their approach to pay transparency is a strategic imperative. There are so many key questions here. What do we need to do? Where is all the data? Do we have one system or several systems?” she said.
Within the US, currently more than a dozen states have introduced pay transparency laws or set a date for implementation, but depending upon the state, the rules businesses must follow can vary, i.e., it’s not a one-size-fits-all. Rules between states diverge on issues such as under what circumstances pay ranges must be provided to job applicants and also to what extent the regulations are applied to companies of varying size. This means companies who operate in multiple states are faced with the choice of customizing their response state-by-state or going for a single approach. According to Nancy, more companies are opting for the latter approach.
“We’re seeing a centralization of sorts right now, with transparency strategies playing out at the country level. So, if a company has significant operations in, for instance, New York and California, they might decide they’re not going to do different things in different states. They’re going to have one US view,” she said.
On top of that, companies with an international presence are also obliged to deal with the reality of facing different requirements in different jurisdictions. In particular, the EU Pay Transparency Directive tends to go further than current US legislation. Key to our own focus here, whereas US regulations have thus far not extended to equity compensation, the EU legislation – which must be transposed into law in all member states by June 2026 – goes further, requiring companies to make disclosures on compensation beyond basic salary.
This scenario sees companies operating in the US and EU facing the choice of whether to customize their pay transparency approach to match the letter of the law region by region or adopt a universal approach that meets or perhaps even goes beyond the most demanding standard they face. Nancy explained that increasing numbers of companies are debating the merits of this choice.
“A lot of our clients are global employers and they are realizing that there are eyes on all forms of discretionary compensation and beyond, because in the EU Pay Transparency Directive, they talk about benefits, they talk about allowances, they talk about a myriad of different things. There is a challenge here, but also an opportunity to lean in and just lay it all out. It looks like there’s going to be some level of disclosure that you’re going to have to make on all forms of compensation. Against that backdrop, you need to ask the question, do you want others telling your story or do you want to tell your story?” she said.
When asked what was the number one thing companies can do to prepare for the requirement to comply with pay transparency legislation, Nancy stressed the need for companies to take a calm and considered approach.
“Don’t just dive in and be reactive. Understand what it means, understand what is required of you. Spend time assessing it. Be planful and intentional around what you’re going to do. Try to be proactive and strategic around it, and that’s going to serve you well,” she said.
To listen to the full interview, click here
Please Note: This publication contains general information only and J.P. Morgan Workplace Solutions is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. J.P. Morgan Workplace Solutions’ Insights is not a substitute for professional advice and should not be used as such. J.P. Morgan Workplace Solutions does not assume any liability for reliance on the information provided herein.
