Has your boss earned your annual salary already?
Research by the High Pay Centre found that median FTSE 100 boss’s earnings for 2022 will surpass the average UK salary at about 9am today.
The think tank’s calculations are based on a previous High Pay Centre analysis of CEO pay disclosures in companies annual reports, combined with government statistics showing pay levels across the UK economy.
This is the first time since the High Pay Centre was founded in 2011 that CEOs have needed to work into a fourth day in order to make the same pay a full time worker would make in a year.
The most recent figures on CEO pay showed a 17% fall to £2.7m in 2020 from £3.25m the previous year, in light of the temporary pay cuts and bonus cancellations during the pandemic.
Most FTSE 100 firms have not yet announced CEO pay for their financial year ending in 2021, but 57% of those that have recorded an increase on 2020 levels.
In light of the huge pay gap between FTSE CEOs and the vast majority of workers, the High Pay Centre carried out polling with Survation on the public’s views regarding high earners and how they make their money.
It found that 77% of people agree that high earners have had advantages in life such as more expensive education, family money and connections. Seven in 10 (71%) agreed that high earners benefit from government policy more than low and middle earners.
Six in 10 (59%) disagreed with the statement that high earners do more valuable work than low/middle earners, while 63% disagreed that high earners work harder than low/middle earners.
The High Pay Centre said that boards that set executive pay justify very high pay-outs on the basis that those at the top work harder or do more important jobs than the rest of us, but these findings show that this assumption isn’t shared by the general public.
The think tank said policies such as putting workers directors onto pay-setting committees could introduce some valuable ‘real world’ perspective into decisions on pay.
Frances O’Grady, TUC general secretary, 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.
“Executive pay committees have to change. They should be required to include workforce representatives who can speak up for a fair balance of pay with ordinary workers. And 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.”