The bosses of Britain’s biggest companies will have made more money in 2022 by breakfast time on Friday than the average UK worker will earn in the entire year, according to analysis of the vast gap in pay between FTSE 100 chief executives and everyone else.
The High Pay Centre, a thinktank that campaigns for fairer pay for workers, said that by 9am on 7 January, the fourth working day of the year, a FTSE 100 chief executive will have been paid more on an hourly basis than the UK worker’s annual salary, based on median average remuneration figures for both groups.
The country’s biggest unions said it was disgraceful that “greedy executives are taking home millions while ordinary workers face yet another year of pay squeezes”, and they demanded that firms be forced to appoint a frontline worker to executive pay committees.
FTSE 100 chief executives were paid £2.7m on average in 2020 (the latest full-year figures available), which works out at 86 times the £31,285 average salary for full-time UK workers, according to Office for National Statistics figures.
The average CEO pay fell 17% in the 2020 financial year as many bosses took a temporary pay cut at the start of the pandemic and first national lockdown and many of their bonuses were cancelled. It means that this is the first year in a decade that CEOs have had to work into the fourth day of the working year to make the same amount as the average full-time worker in a year.
Most FTSE 100 companies have not yet announced CEO pay for their financial year ending in 2021, but 57% of those that have done so have recorded an increase on 2020 levels, the High Pay Centre report said.
Frances O’Grady, the general secretary of the TUC, said: “The pandemic has shown us all who keeps the country going during a crisis. There are millions of hardworking people in Britain – from carers, to delivery drivers, to shop floor staff – who give more than they get back, but greedy executives are taking home millions while ordinary workers face yet another year of pay squeezes.
“As we emerge from the pandemic we need to redesign the economy to make it fair, and that means big reforms to bring CEO pay back down to earth.”
O’Grady said the company committees that set CEO pay must be “required to include workforce representatives who can speak up for a fair balance of pay with ordinary workers. Incentive schemes for company directors should be replaced by profit-share schemes that include the whole workforce. Too much wealth is being hoarded at the top.”