Top Bosses Already Paid More than UK Average Wage
The median pay for a UK FTSE 100 CEO has risen to £4.22 million according to new research from the High Pay Centre – meaning that by noon today, after only 3 days of work, UK CEOs had already made a year’s average UK salary.
This puts CEO pay in the UK at record levels, and they want more: lobbyists from the city have been arguing that the UK’s CEO pay is too low compared to the US, where pay has risen by nearly 1000% in four decades. This lobbying has paid off with the removal of many bank bonus caps that were brought in after the financial crisis, despite polling showing 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 – much less than the actual ratio of 113.
How Quickly Will UK CEOs Earn Your Salary?
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.
There are reasons to be hopeful about the government’s forthcoming Employment Rights Bill, which will expand workers rights and the rights of trade unions for the first time in decades. As the High Pay Centre points out, the decline in union membership across developed economies has come alongside growing gaps between worker and CEO pay, so beginning to restore rights to unions may help address that. However, this too has been subject to fierce lobbying from corporate interests, and any benefit on the pay gap will be slow. With inequality rapidly increasing and tension in our society growing, we need action now.
