UK’s top bosses earn an average worker’s annual salary by close of business on January 6
According to independent analysis by the High Pay Centre thinktank, the UK’s top bosses are paid 115 times more than the average worker.
The statistic means that by 5.30 pm today they will have already earned more than the average UK worker will earn in the entirety of 2021. The chief executives of FTSE 100 companies are paid a median average of £3.6m a year; the average full-time UK worker earns on average £31,461.
Trade union leaders have described the vast earnings gap as “unfair” and “repugnant.”
Warren Kenny, acting general secretary of the GMB union said: “These repugnant figures expose the sheer scale of inequality and exploitation in the workplace.”
Frances O’Grady, general secretary of the Trades Union Congress, said the news “tells you everything you need to know about how unfair our economy is.”
The thinktank’s calculations assume CEOs work 320 12-hour days a year, which equates to hourly pay of £941 an hour. It would take a worker on the full UK minimum hourly wage rate of £8.72 212 years to earn the same as the average CEO earns in a year.
Michael Bognanno has written about the ongoing debate over efficient markets, managerial power, and CEO compensation for IZA World of Labor. He says: “Both sides of the debate over CEO pay implicitly acknowledge that self-interest motivates CEOs. Critics believe that structures to protect shareholders from excessive CEO compensation are inadequate, while advocates view pay as competitively determined. While both sides make a compelling case in this evolving literature, managerial power has exerted an influence on CEO pay. Although empirical evidence of effectiveness is lacking, measures that enhance the transparency of compensation packages and strengthen the voice of shareholders on pay issues might help move CEO pay toward just levels.”
Read more from IZA World of Labor on pay and incentives.