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The nation's largest public companies could quickly have to publish the gap between the pay of their chief govt and a common employee.
Business Secretary Greg Clark says administrators of all firms with greater than 250 workers will be required to disclose and clarify this distinctionreferred to as the "pay ratio".
Equal pay campaigners, enterprise and investor teams, welcomed the plan.
But the TUC stated it was "a first step" and even harder guidelines had been wanted.
TUC basic secretary Frances O'Grady stated assured locations for employee representatives on boardroom pay committees would carry "common sense and fairness to decision-making when boardroom pay packets are approved."
In latest years shareholders have turn into more and more vocal over govt pay ranges, and have voted towards what they see as extreme pay awards, most notably the excessive sums paid to former WPP boss, Sir Martin Sorrell.
But high stage remuneration, notably chief executives, is usually linked to the efficiency of the share value.
The new guidelines, in addition to introducing the publication of pay ratios, will additionally require listed firms to present what impact an improve in share costs will have on govt pay, so as to inform shareholders when voting on long-term incentive plans.
The plans, which will be introduced to Parliament on Monday, comply with considerations that some chief executives have been receiving salaries which are out-of-step with firm efficiency.
Mr Clark stated: "Most of the UK's largest companies get their business practices right, but we understand the anger of workers and shareholders when bosses' pay is out of step with company performance."
The plans had been welcomed by the Investment Association, in addition to the enterprise foyer group the CBI and the High Pay Centre.
Chris Cummings, chief govt of the Investment Association, stated traders needed better director accountability and extra transparency over govt remuneration.
"Investors will expect boards to articulate why the ratio is right for the company and how directors are fulfilling their duties," he stated.
The director of the High Pay Centre, Luke Hildyard, stated pay ratios may show helpful to traders, workers and society extra broadly.
"We hope that [the move] will initiate a more informed debate about what represents fair, proportionate pay for workers at all levels," he stated.
The Confederation of British Industry's Matthew Fell stated excessive pay was solely ever justified by excellent efficiency: "This legislation can help to develop a better dialogue between boards and employees about the goals and aspirations of their business, and how pay is determined to achieve this shared vision."
If authorised, the laws will come into impact from the beginning of subsequent yr, that means firms will begin reporting their pay ratios in 2020.