The bosses of Britain’s largest public companies have earned an average of £5.5m last year, says a recent report by the High Pay Centre.
Company bosses have received 10 percent pay rises, while only a quarter of FTSE 100 firms pay the living wage, leading to an “unhealthy and growing” gap in wages, a new report said.
The report showed the average pay package for a chief executive was £5.48m in 2015, up from £4.96m in 2014.
Think-tank High Pay Centre said its research also found that chief executives on London’s FTSE 100 index were paid 129 times more than their employees on average.
Stefan Stern, director of the High Pay Centre, said the latest report showed there was “no end yet in sight” to the rise of FTSE 100 pay packages.
In contrast to the “generous” pay packages awarded to executives, only a quarter of FTSE 100 firms are accredited by the Living Wage Foundation for paying the voluntary living wage to their employees. Only one company has an employee representative on the board, while none publishes details of the pay ratio between chief executives and other employees.
Leading company bosses now typically earn 129 times more – including pensions and bonuses – than their employees.
For the average worker, wages rose by two percent in 2015, according to the Office for National Statistics.
The head of the advertising group WPP, Sir Martin Sorrell received the highest amount, a total of more than £70m.
Other high earners were Berkeley Group’s Tony Pidgley, and Reckitt Benckiser’s Rakesh Kapoor, both of whom took home more than £23m last year.
In response to the High Pay Centre report on CEO pay Peter Cheese, Chief Executive at the CIPD, the professional body for HR and people development said:
“There is still a shocking disconnect between pay for those at the top and the rest of the workforce in large companies. Worse still, this gap is continuing to grow despite our latest data showing that it leads to a real sense of unfairness that has a clear impact on employee motivation.
“A recent CIPD study showed that six in ten (59 percent) of employees say that high levels of CEO pay in the UK demotivates them at work. The message from employees is clear: ‘the more you take, the less we’ll give’. This kind of culture in the workplace is bad for both employers and employees. Furthermore, when pay for those at the top is not linked to either personal performance or business outcomes, it undermines trust in business, not just from employees but from customers and other stakeholders.
Rebecca joined the HRreview editorial team in January 2016. After graduating from the University of Sheffield Hallam in 2013 with a BA in English Literature, Rebecca has spent five years working in print and online journalism in Manchester and London. In the past she has been part of the editorial teams at Sleeper and Dezeen and has founded her own arts collective.
Interesting that they continue to afford such large remuneration packages for CEOs whilst the same FTSE100 companies are showing pension fund deficits in excess of £43bn.