6 January marks ‘High Pay Day’
6 Jan 2021
By the end of today, earnings for the typical FTSE 100 CEO will have surpassed the total annual wage for a full-time worker in the UK, according to research from the High Pay Centre
6 Jan 2021
The campaigning group says its calculations suggest CEOs at the UK’s top companies have to work 34 hours of the year to collect the median annual wage, meaning that they will have earned this amount by 5.30pm on 6 January.
Based on previous analysis of CEO pay disclosures, the High Pay Centre says executive pay levels have remained essentially flat, while pay for UK workers has increased slightly, so that CEOs have to put in one extra hour of work this year compared to the previous year before collecting the median pay rate for employees.
However, the report points out that the most recent figures on CEO pay and UK full time workers’ annual earnings are still too dated to fully account for the impact of coronavirus , and warns it remains to be seen how this has affected pay gaps across the UK, both over the duration of the pandemic and in the longer term.
An earlier review of FTSE 100 CEO reward for the financial year ending 2019, conducted by the High Pay Centre and CIPD an published last summer, found both median and mean pay packages had dropped slightly on the previous year.
Median pay was at its lowest level since 2011 at £3.61m, while half the FTSE 100 paid less to their CEOs in 2019 than in 2018, with the number of companies paying their CEOs more than £10m dropping from eight to six.
However, 49 companies paid more to their CEOs in 2019, with three firms paying their CEOs more than double than in 2018.
Overall, the High Pay Centre’s latest research indicates that pay for top CEOs today is about 120 times that of the typical UK worker. Estimates suggest it was around 50 times at the turn of the millennium or 20 times in the early 1980s.
The thinktank’s calculations assume ‘a highly demanding workload’ for CEOs of 320 12-hour days of work a year. This equates to hourly pay of £941 an hour.
It would take a worker on the full minimum wage rate of £8.72 an hour 212 years to earn the same as the average CEO earns in a year.
Commenting on the findings, TUC General Secretary Frances O’Grady said: ‘This tells you everything you need to know about how unfair our economy is.
‘Our army of minimum wage workers – carers, shop assistants and delivery drivers – have kept the country going through the pandemic. Not these CEO’s at the top raking in far more than their share.
‘If the government is serious about levelling up Britain, it needs to start by levelling up pay and conditions for those we most rely on, and stop the threat to freeze key workers’ pay.
‘Ministers must bring forward the long-awaited employment bill to end exploitative working practices like zero hours contracts, and boost rights and pay.’