Pay gap widens as UK bosses earn 130 times average worker’s salary
The High Pay Centre reports that median pay for FTSE 100 CEOs has reached a record £5.06 million, highlighting a growing disparity between executive and average worker salaries.
By The Guardian
The pay gap between UK executives and average workers has reached its highest level in eight years, with FTSE 100 chief executives now earning 130 times the salary of a typical full-time employee. According to the High Pay Centre’s final report, the median remuneration for FTSE 100 CEOs has risen to a record £5.06 million in the last financial year, marking an 8.6% increase from £4.66 million the previous year.
This increase in CEO pay reflects the highest level recorded for Britain’s largest listed companies. The ratio of executive pay to that of the average worker has grown from 124 times in the previous financial year to 130 times, indicating the widest earnings gap since 2017.
The High Pay Centre, which analyses executive remuneration, released this data to underscore the increasing disparity between corporate leaders and ordinary employees. The report indicates that the bosses of the UK’s largest listed companies received record pay last year, raising concerns about income inequality within the UK economy.
The report did not specify individual companies or local Cheshire businesses. However, it noted that FTSE 100 firms collectively spent £856.6 million on executive pay during the last financial year, with £550 million allocated to chief executives alone.
Andrew Speke, interim director of the High Pay Centre, stated, “The substantial growth in the gap between executive and worker pay in the last year should be a wake-up call to those who’ve turned a blind eye to rising executive pay.” He expressed hope that a change in political leadership might bring renewed focus on economic fairness.
The median pay for a full-time UK worker is reported to be £39,000, according to the UK’s Annual Survey of Hours and Earnings. The report also highlighted that the total amount paid to FTSE 100 executives had decreased to £857 million from £1 billion in the previous report, while the mean pay fell from £6.09 million to £5.89 million.
The High Pay Centre attributed this decline to an exceptionally high pay award of £212 million given to executives at Melrose Industries the previous year, following its acquisition of GKN.
Sixty-six of the 94 large listed companies analysed increased their chief executive’s pay package from the previous year. The mean long-term incentive payment rose by a fifth to £2.7 million, while the mean short-term incentive payment increased by 14% to £1.8 million.
Pascal Soriot, chief executive of AstraZeneca, was identified as the highest-paid boss in the FTSE 100 last year, earning £17.7 million. He has held this position for three of the last four years. Emma Walmsley of GSK, despite stepping down as CEO, received a near-50% pay rise to £15.6 million in her final year.
The High Pay Centre argues that excessive spending on executive pay by large companies detracts from potential pay increases for the wider workforce. The organisation is advocating for reforms in the regulations governing executive pay-setting, including proposals for a “fat-cat tax” and measures to enhance workers’ rights.
Speke concluded, “This is the fourth year in a row that FTSE 100 executive pay has risen, and this growth is starting to substantially outstrip growth in worker pay.”