Pay gap widens as UK bosses get 130 times average worker’s salary | Executive pay and bonuses

Bosses at Britain’s biggest listed companies earned record wages last year, fueling the widest earnings gap with workers in eight years.

According to data released by the Center for High Pay, the average salary for FTSE 100 senior executives reached £5.06 million in the last financial year; this was up 8.6% on the previous year to £4.66 million and the highest in history.

Executive salaries have been rising steadily since the pandemic, with CEOs taking pay and bonus cuts as lockdowns affected business performance.

The analysis found listed company bosses are now paid 130 times the salary of the average full-time UK worker, up from 124 times in the previous financial year. This is the largest difference since the rate reached 137 by the end of March 2018.

The High Pay Center said FTSE 100 companies spent £856.6 million on wages in the last financial year, including £550 million in remuneration for senior executives. The think tank was founded in 2011 by former Guardian business editor Deborah Hargreaves. It will be closed after 15 years of campaigning for fairer wages for workers.

Interim director Andrew Speke said: “The significant growth in the gap between executive and worker pay last year should be a wake-up call to those who ignore rising executive pay.

“We hope that a change in Prime Minister and a renewed focus on economic justice will lead to economic inequality and corporate excess returning to the political agenda.”

Andy Burnham, who will become prime minister on Monday, had previously said this. needs to be discussed publicly He promised to provide “breathing space” as soon as possible to families struggling to make ends meet against high and excessive wages.

The average salary for a full-time UK worker is £39,000, according to the UK’s Annual Survey of Working Hours and Earnings, based on estimates in October.

The amount paid to FTSE 100 executives fell to £857 million from £1 billion in the previous report, while the average pay fell from £6.09 million to £5.89 million.

The High Pay Center said the decline was the result of an extraordinarily high pay award of £212 million handed out by engineering firm Melrose Industries last year, after executives acquired aerospace and automotive group GKN for £8 billion in a hostile takeover in 2018.

66 of the 94 large companies participating in the analysis increased the salary package of their CEOs compared to the previous year.

The average long-term incentive payment (LTIP) increased by a fifth to £2.7 million and the average short-term incentive payment (STIP) increased by 14% to £1.8 million.

Pascal Soriot, chief executive of pharmaceutical company AstraZeneca, was the highest-paid boss in the FTSE 100 last year, taking home £17.7 million.

Soriot has been the highest-paid chairman of a publicly traded company in three of the last four years. He was displaced by Melrose bosses in the previous report.

GSK’s Emma Walmsley is the only woman in the top 10, despite leaving her role as the pharmaceutical company’s boss at the beginning of the year. Walmsley rose to second place thanks to his salary rising by almost 50% to £15.6 million in his final year in charge.

Barclays chief executive CS Venkatakrishnan was paid £15 million last year following the removal of EU rules limiting bonus payouts for UK banks. It was the biggest package for a Barclays boss since Bob Diamond took home £17 million in 2011.

Last year’s top five earners included Shell boss Wael Sawan, who increased his pay by 60% to £13.7 million despite a drop in profits, and Standard Chartered chief executive Bill Winters, who received £12.7 million.

The High Pay Center argues that “excessive spending” by large listed companies on bosses has led to wage increases for the rest of the workforce.

The think tank is calling for reforms to the regulations governing the pay-setting process followed by companies, including a “fat cat tax”, the appointment of two workers as board directors and full implementation of Labour’s employment rights bill, which includes measures requiring employers to inform workers of their union rights.

Speke said: “As our findings show, this is the fourth year in a row that FTSE 100 executive salaries have increased and this growth is beginning to significantly outpace workers’ pay growth.

“Failure to tackle such disproportionate and inefficient levels of inequality will further diminish our faith in our current economic model and help fuel the rise of right-wing populism.”