CEOs Paid a Full Year’s Wage in Just 29 Hours
CEOs at FTSE 100 companies in the UK will enjoy an average pay of £4.4 million this year, according to new research from the High Pay Centre, which means they’ll be paid an entire year’s wage for the median full-time worker in just 29 hours.
Polling the public has regularly shown that a majority of the UK would favour capping CEO pay at a multiple of a company’s average wage, with most saying CEO pay should be limited to a ratio of 10 times average pay or lower. Despite that, FSTE 100 CEOs are actually paid an incredible 113 times more than workers on average, but individual companies can have much bigger pay gaps: last year, Tesco CEO Ken Murphy was paid 431 times more than his employees. Melrose, an aerospace group, paid their CEO nearly £59 million last year, which is 1509 times the median full-time wage and enough to out-earn the year’s salary in just three hours.
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Do something about it!
Extreme pay is a serious inequality problem. Research has found links between excessive CEO pay and lower trust of corporations, worse relations with employees, worse job satisfaction, worse products, and higher inflation. And of course, today’s data from the High Pay Centre only looks at salary: the vast majority of CEO compensation comes from other bonuses. As executives make vast and growing sums through stock options, it encourages the kind of toxic focus on share price that leads companies to damage society, their workers, and their long-term sustainability as a company.
That’s why we’ve joined the High Pay Centre to propose a new “Fat Cat Tax“: an surcharge to corporation tax where companies would pay a higher levy the more they overpay their CEO. Not only would this disincentivise the kind of wild pay disparities we’re seeing, the revenue could be invested in undoing some of the worst effects of income inequality.
Like the idea? We’re running a joint petition with the High Pay Centre which you can sign now!