You are here: Home - Household Bills - News -

FTSE 100 bosses earn 133 times more than average worker

Written by: Danielle Levy
The average FTSE 100 chief executive earned £3.9m in 2017, according to research from the CIPD and High Pay Centre.

The professional body for HR and people development analysed the most recent data available for FTSE 100 chief executive officer (CEO) pay and found that earnings in this segment increased by 11% to £3.9m in 2017. This figure is based on the assumption that bosses worked 12 hours per day for 320 days per year.

This means the bosses of the UK’s largest 100 listed companies earned 133 times more than the average worker. The CIPD and High Pay Centre concluded that a typical FTSE 100 chief executive only needs to work for the first three days of 2019 to earn the same amount as the average full-time worker’s gross annual salary, which stands at £29,574.

With this in mind, the CIPD has nicknamed 4 January “Fat Cat” Friday.

In light of these findings, the professional body is calling on remuneration committees, which are in place for all FTSE 100 companies, to do more to ensure that executive pay is aligned with the rewards that are given to the wider workforce. They suggest taking into account the non-financial performance of companies, including factors like employee wellbeing and investment in training and development.

The CIPD and High Pay Centre have also suggested a simplification of executive pay, based on a basic salary and an incentive to deliver long-term performance, with a smaller share award given in comparison to recent history.

“Average pay has stagnated whilst top CEO reward has grown, despite overall slow economic growth and very variable business performance,” said Peter Cheese, chief executive of the CIPD.

He notes that excessive pay packages awarded by remuneration committees represents a significant failure in corporate governance and perpetuates an idea of a ‘superstar’ business leader.

“This imbalance does nothing to help heal the many social and economic divides facing the country,” he added.

A different view

Taking a different perspective, the Adam Smith Institute, a think tank, described the findings as “cod statistics”.

“Another year, another set of cod statistics on executive pay. If these activist organisations actually cared about workers — and not just the politics of envy against our best and brightest — they would talk about ways to actually increase worker pay,” said Matthew Leesh, head of research at the Adam Smith Institute.

“The only way to increase wages is by boosting productivity through innovation, cutting red tape, and making it easier for people to move for jobs.”

Leesh believes that limits on executive pay would drive “top British talent” and companies offshore, ultimately leading to fewer jobs and lower pay for workers.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week