Britain’s Top Bosses Earn Average Worker’s Salary In Just Three Days
New research from the think tank High Pay Centre has found Britain’s top bosses earn an average worker’s salary in the space of just three days.
The study found the median FTSE 100 CEOs earnings for 2021 will have already surpassed the median annual wage for a full-time UK worker by 5.30pm today, Wednesday, January 6.
The current salary for top CEOs is reported to be roughly 120 times that of the average worker in the UK. Estimates suggest this was around 50 times at the turn of the millennium, and 20 times in the early 1980s.
According to the High Pay Centre, the calculations draw from previous analysis of CEO pay disclosures made in annual company reports, as well as from government statistics that show pay levels across the UK economy.
It’s estimated that CEO pay levels essentially remained flat, while pay for UK workers had shown a slight increase. This reportedly meant that median FTSE 100 CEOs had to work 34 hours of the year to overtake median earnings, rather than the 33 hours recorded in 2020.
In reference to the research, High Pay Centre director Luke Hildyard told BBC News:
Factors such as the increasing role played by the finance industry in the economy, the outsourcing of low-paid work and the decline of trade union membership have widened the gaps between those at the top and everybody else over recent decades.
Hildyard suggested the figures should spark concern in regards to the governance of Britain’s largest companies, adding: ‘They should also prompt debate about the effects that high levels of inequality can have on social cohesion, crime, and public health and wellbeing.’
However, there are those believe high wages for top CEOs is warranted as a means of attracting and keeping the very best talent.
Head of programmes at the Adam Smith Institute, Daniel Pryor, said:
Good management is more important than ever in a globalised world and small differences in top talent make a big impact on a business’ bottom line.
That bottom line makes a big difference to workers across the UK, anyone with a private pension, and shareholders.
As per the High Pay Centre, the median FTSE 100 CEO pay was £3.61 million in 2019, the last year when a complete set of data was available. Analysis was based on a CEO’s average working day being 12 hours.
Pryor added: ‘In the past 60 years, unexpected CEO deaths have consistently affected stock price, profitability, investment and sales growth – for better or worse. Which is why it makes sense for firms to open their wallets to attract the best talent.’
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High Pay Centre