FTSE chiefs earn 109 times average UK workers
A report published by think tank the High Pay Centre and the Trades Union Congress found that on average FTSE 100 chief executives saw pay rise from £2.46m a year in 2020 to £3.41m in 2021.
Even so, the eyewatering median salary is dwarfed by those at the top of the pay scale.
Sebastien De Montessus, chief executive of mining company Endeavour, earned £16.85m last year followed by Pascal Soriot of AstraZeneca who took home £13.86m and Albert Manifold of construction firm CRH who earned £11.68m.
Frederic Vecchioli, chief executive of FTSE 250 company Safestore, was paid £17.06m last year – more than any FTSE 100 CEO.
It means median CEO pay is now 109 times that of the median UK full-time worker, compared to 79 times in 2020 and 107 times in 2019.
The report said “excessive” salaries awarded to those running the UK’s largest companies reflected “widening inequality” experienced across the UK more generally.
“This research raises questions around inequality, pay and responsible business practice in the UK,” it said.
“Very high executive pay is a big part of the cost of living problem. If large employers are paying millions more to already very wealthy executives, that makes it harder to fund pay increases for low and middle income workers.
“If incomes in the UK were shared more evenly, that would significantly raise the living standards of the people hit hardest by the current economic crisis.”
The analysis also found that FTSE 100 firms spent nearly three quarters of a billion on executive pay, with £720.21m awarded to just 224 executives. FTSE 250 CEOs saw a 38% pay increase, with median pay rising from £1.25m in 2020 to £1.72m in 2021.
FTSE 100 CEOs annual bonuses also leapt, to £1.4m compared to £828,000 in 2020 and £1.1m in 2019. Nine out of 10 chief executives received a bonus.
Union ‘intrusion’ into private companies branded unwelcome
Professor Len Shackleton, editorial and research fellow at the Institute of Economic Affairs, said the data was “of interest” but argued it did “not justify yet more state intrusion into privately-owned businesses”.
“Casual readers of these figures may think of the FTSE-100 companies as ‘British’ companies, which the government and pressure groups can boss around in response to the latest political whim,” he said.
“But most of these companies are in reality multinational businesses, listed here because our company law and broadly favourable investment climate has until now made this a sensible thing to do. This hugely benefits the UK as a financial centre, and the taxpayer.”
FTSE-100 companies compete in international markets for goods, services and resources – including top managerial talent. Around 40 per cent of their CEOs are foreign nationals and can work in other countries where pay packages are at least as generous, and in some cases more so, added Shackleton.
He said: “Imposing restrictions on CEO pay or imposing trade union representatives on remuneration committees as the HPC wishes, or on company boards as the TUC wishes, would make working, investing and company listing in the UK much less attractive.
“Inviting union representatives into every business, another demand, promises to add nothing to the productiveness of UK-based firms, particularly at a time when many unions seem to have reverted to a 1970s-style confrontational position.”
The top 10 FTSE 100 companies with the highest CEO pay
|Endeavour||Precious metals and mining||Sebastien De Montessus||16.85|
|Astra Zeneca||Pharmaceuticals and Biotechnology||Pascal Soriot||13.86|
|CRH||Construction and Materials||Albert Manifold||11.68|
|Anglo American||Industrial Metals and Mining||Mark Cutifani||9.83|
|Lloyds Banking Group||Banks||Antonio Horta Osorio, William Chalmers, Charlie Nunn (combined pay for time in post as CEO)||8.86|
|Schroders||Investment Banking and Brokerage Services||Peter Harrison||8.48|
|Flutter||Travel and Leisure||Peter Jackson||8.4|
|GSK||Pharmaceuticals and Biotechnology||Emma Walmsley||8.2|
|Berkeley||Household Goods and Home Construction||Rob Perrins||7.97|
Source: High Pay Centre and TUC