The UK’s top bosses will have made more money by lunchtime on Wednesday than the average UK worker will earn all year, the High Pay Centre think tank has said.
The analysis exposes the gulf between executives and the rest of the workforce, comparing the staggering pay gap between top executives and average UK pay packets, and is branded a”Fat Cat Wednesday”
Campaigners say that public anger with elites will intensify unless action is taken to tackle excess among executives at a time when pressures on household budgets are rising.
The High Pay Centre calculated that the average FTSE 100 boss now earns more than £1,000 an hour, meaning they will pass the UK average salary of £28,200 by around midday.
High Pay Centre director Stefan Stern said forcing companies to publish pay ratios would be a good start.
“Our new year calculation is not designed to make the return to work harder than it already is. But ‘Fat Cat Wednesday’ is an important reminder of the continuing problem of the unfair pay gap in the UK,” he said.
“We hope the government will recognise that further reform to pay practices are needed if this gap is to be closed.”
“Effective representation for ordinary workers on the company remuneration committees that set executive pay, and publication of the pay ratio between the highest and average earner within a company, would bring a greater sense of proportion to the setting of top pay,”
Frances O’Grady, the TUC general secretary, said the prime minister must stick to her commitment to put workers on boards.
“Working people deserve a fair share of the wealth they help create. But while the pay of top executives has been rocketing up, the average weekly wage is still worth less than it was nine years
The Fat Cat Wednesday calculation assumes bosses started back at work after Christmas on 2 January and is based on median FTSE 100 chief executive pay of £3.97m in 2015 – up from £3.87m in 2014.
The High Pay Centre’s hourly pay rate calculation assumes that the executives work 12 hours a day, most weekends and take fewer than 10 days holiday a year.
Labour market experts said that despite continued talk of reforming executive pay, the gulf between top bosses and average workers was likely to widen this year as employers hold off pay rises because of the uncertainty surrounding Brexit and cost pressures from a weak pound.
Ben Willmott, the head of public policy at the CIPD said:
“The situation is likely to get worse before it gets better,”
“Higher inflation in 2017 will mean many frontline workers will face a pay squeeze at a time when FTSE 100 CEO pay is already 129 times that of the average employee.”
He also highlighted CIPD research that found six in 10 employees identified CEO pay as an issue that demotivates them at work. “The message from the workforce is clear: ‘the more you take, the less we’ll give’,” he said.