UK CEOs earn 183 times more than average worker, says think tank

Chief executives of the biggest companies in the UK earn 183 times more than the average full-time worker, according to new research.

Figures released by the High Pay Centre think tank show that, in 2014, the average CEO salary among the top 100 companies on the London Stock Exchange was just under £5 million. In the same year, the median salary for a full-time employee in the UK was just over £27,000.

According to the High Pay Centre’s analysis, the executive pay gap is now significantly higher than it was in 2010, when the average CEO earned 160 times more than the average worker.

In 2013, the UK government introduced legislation obliging public companies to disclose details of CEO pay, but information on employee salaries is not required. The High Pay Centre is calling for regulations similar to those recently adopted in the US, under which larger public companies will be forced to publish the ratio of chief executive compensation and average employee salary.

High Pay Centre director Deborah Hargreaves commented that: “Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives.” She added that the 2013 reforms “do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.”

IZA World of Labor author Michael Bognanno has written about the growth in CEO compensation over recent decades. He writes that: “Although empirical evidence of effectiveness is lacking, measures that enhance the transparency of compensation packages, strengthen the shareholder voice on pay issues, and limit the CEO’s freedom to exercise stock options might help move CEO pay toward just levels.”

Read more on this story at BBC News. The High Pay Centre report can be found here.

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