Soaring director pay outstrips employee wage rises
While wage growth fails to ignite for the majority of the UK population, FTSE 100 directors’ pay soared 21 per cent over the past year, according to new research by Income Data Services.
The average chief executive now earns around 120x more than a full-time employee.
The median total earnings for a FTSE 100 director is now £2,433,000 and £3,344,000 for a chief executive, compared to just £27,000 for the average worker.
Steve Tatton, editor of the IDS report, comments: “FTSE 100 directors have seen their total earnings jump sharply in the last year, fuelled by a rise in the value of share based awards. Bonus payments have also recovered strongly following a downturn last year.”
Media, marketing and telecommunications drew the highest director pay at £6,981,849, followed by transport and leisure at £5,095,838. Financial services’ director pay was £4,734,000. The lower sectors were utilities, e-business, software & computer services, followed by retail & distribution at the bottom.
At the same time, a report by the TUC found that workers across the UK face the seventh consecutive year of falling real earnings – a situation that has no historical precedent. Even the pay squeeze of the long depression of the 1920s was shorter. The total decline in earnings since 2007 is over eight per cent, according to the organisation’s analysis.
The TUC study compares the current situation with four major earnings crises in UK history – 1865-67, 1874-78, 1921-23, 1976-77. The real wages drops during each of these crises lasted only two years, apart from 1874-78 when there were four consecutive years of falling real earnings.