In just three working days, the typical FTSE 100 chief executive has earned more than the average annual salary of a full-time worker.
According to think tank The High Pay Centre and the CIPD, the professional body for HR and people development, today (4 January 2018) marks ‘Fat Cat’ day for top bosses.
They say that the median pay of FTSE 100 chief executives was £3.45 million in 2016. In comparison, the median pay for full-time workers stood at £28,758 in 2017.
They worked out that it would take a FTSE 100 chief executive around 32 hours’ work to reach the UK median earnings figure. This is based on the assumption that FTSE 100 chief executives work 12 hours a day, including three out of every four weekends, and take only 19 days’ holiday per year, so are paid £898 per hour.
The High Pay Centre and the CIPD are working together to ensure that high pay is addressed as part of a broader review of corporate governance in the UK, including greater transparency on workforce data.
Peter Cheese, chief executive of the CIPD, says: “It’s crucial that the government keeps high pay and corporate governance reform high on its agenda. We also need business, shareholders and remuneration committees to do their part and challenge excessive pay, to understand pay and reward for top executives in the context of the whole organisation, and look at how pay is linked to driving sustainable performance.”
Luke Hildyard, stewardship and corporate governance policy lead at the Pensions and Lifetime Savings Association (PLSA), adds: “Huge pay differences between executives and the wider workforce symbolise how too many companies fail to understand or appreciate the value of their workers.
“While companies spend a lot of time devising complicated and very generous pay awards, our Hidden Talent research found that only 7% of FTSE 100 annual reports detail the ratio between the chief executive’s pay and the wider workforce; only 21% provide evidence of how much they are investing in training and staff development; and just 7% show how much they rely on agency workers or other types of insecure employment.”
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