Report reveals inequality and ridiculous pay
Only 34 companies in the FTSE 100 are accredited by the Living Wage Foundation for paying the living wage.
New research from the High Pay Centre and the Chartered Institute of Personnel and Development (CIPD) has found that a FTSE 100 CEO is now paid an average (median) annual pay of £3.93 million per year.
Apart from anything else, this is 265 times more than that of a minimum wage worker and 137 times more than a worker on the UK’s average wage of £28,758.
Just seven of the FTSE 100 CEOs are women. This is an increase from six in 2016 and five in 2015. At the current rate of one new female CEO each year it will take another 43 years for women to make up 50 per cent of the FTSE 100 CEOs.
And while women make up 7 per cent of FTSE 100 CEOs, they earn just 3.5 per cent of total pay.
In addition, only 34 companies in the FTSE 100 are accredited by the Living Wage Foundation for paying the living wage to all their UK-based staff.
The CIPD and the High Pay Centre’s report examined how chief executives working for FTSE 100 firms are rewarded, examining such aspects of remuneration as salaries, bonuses, long term incentives plans and benefits, and lists CEO pay data by mean and median, by industrial sector, by firm size and by gender.
It also has some recommendations for stakeholders interested in creating a fairer and more ethical approach to employee reward.
Analysis by The Equality Trust found the average pay for a FTSE 100 CEO is:
123 times more than a nurse earns;
103 times more than a teacher earns;
96 times more than a police officer earns; and
224 times more than a care worker earns.
Dr Wanda Wyporska, Executive Director of The Equality Trust, said: “The UK is already one of the most unequal countries in the developed world and, today, we have seen those at the top of the pay scale pull further away from the rest of us.
“This is tearing at our social fabric and undermining our social cohesion as the very visible divides between the very rich and the rest of us grow.
“When we see working people forced to rely on food banks and children suffering from holiday hunger during the summer, this increase in top end pay is obscene and a badge of national shame.
“We are pleased to see that the government is bringing forward legislation on pay ratio reporting, which we have long campaigned for.
“However, until we break up the ineffective, cosy club that current UK corporate governance arrangements represent, by having workers on Boards and on Remuneration Committees, then this scandal is set to continue.”
The analysis also found that the typical pay of a FTSE100 chief executive has risen by 11 per cent in the last year, compared to just 2 per cent for the average worker.
Remarking on this, the TUC’s General Secretary, Frances O’Grady, said: “Pay for most people is barely rising at all. So working people will find it hard to understand why fat cat executives are splashing the cash for themselves.
“Workers should get seats on boardroom pay committees to bring a bit of common sense to pay decisions.
“And the government should put the minimum wage up to £10 an hour to give more workers a fairer share of the wealth they create.”
To see the full report, click here.