A full time worker earning the National Living Wage[1] would need to work over 400 years to earn just one year’s average pay for a FTSE 100 CEO, according to new analysis from the Equality Trust.
The Trust found that a worker earning the minimum wage of £7.20 an hour on a 37.5 hour week, with zero pay for bank holidays, would have to work until the year 2417 to match the £5,500,000[2] average annual pay of the chief executives of the UK’s top 100 companies.
The Equality Trust also found that the average pay of a FTSE 100 CEO was:
· 174 times that of a nurse[3]
· 147 times that of a teacher[4]
· 137 times that of a police officer[5]
· 336 times that of a care worker
· 350 times that of someone earning the real Living Wage of £8.25 per hour[6]
Whilst care workers, nurses, teachers and police officers all saw their pay increase by around 1% since 2014, FTSE 100 CEOs saw their pay rise by an incredible 10%.
Despite the regular increase in FTSE 100 CEO pay, there is now strong evidence that executive pay is not linked to performance[7].
The Equality Trust’s analysis comes as the Government published details of the largest ever list of National Minimum Wage offenders[8]. Those companies that have failed to pay employees the full minimum wage.
John Hood, Acting Director of the Equality Trust, said:
“It’s clear that the gap between bosses and workers’ pay has become completely unjustifiable and unsustainable. Executive pay has been grotesquely inflated, while ordinary people have seen their pay barely budge.
“Executives have been treated as talent to be rewarded, while everyone else is seen as a cost to be reduced. But there is robust evidence now that executive pay is not linked to performance. Instead we have a broken market where bosses can simply bid up their pay, whilst undervaluing the input of ordinary workers.
“We need to return to a position of common sense on pay. That means the mandatory publication of pay ratios by large and medium sized companies, to provide some much needed transparency on the pay gap between bosses and workers. It also means the serious consideration of employee representation on company boards.
“The Prime Minister has made some bold statements on tackling excessive executive pay, now she needs to live up to them.”
Notes to editors
The Equality Trust is a registered charity that campaigns to improve quality of life in the UK by reducing economic inequality.
For additional comment or information please contact info@equalitytrust.org.uk
[1] The legal minimum wage of £7.20 per hour for over 25s
[2] £5.48 million – http://highpaycentre.org/pubs/10-pay-rise-thatll-do-nicely
[3] All figures for professions salaries found in Annual Survey of Hours and Earnings – http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2015provisionalresults/relateddata?page=2
[4] Teaching and educational professionals average salary £37,300, according to Annual Survey of Hours and Earnings
[5] Policy officers’ average salary, sergeants and below £40,027 according to Annual Survey of Hours and Earnings