Female FTSE 100 companies’ CEOs dropped from seven in 2017 to six in 2018, however, these women earned more collectively than they did the previous year.
This was discovered in the CIPDs and think tank High Pay Centre annual review of FTSE 100 firms. The female FTSE 100 CEOs pay rose from 3.5 per cent of total pay to the 100 to 4.2 per cent.
At the same time, in general, the pay for CEOs fell by 13 per cent, still they are receiving more than 117 times that of the average salary (£29,574) in the UK.
CEO pay now lies at £3.46 million down from £3.97 million. Yet, just under half of the CEOs (43) did see a pay increase between 2017 and 2018.
The CIPD believes the fall in pay is likely down to the reduction in money through long-term incentive plans (LTIPs) because of the “variable corporate performance and the cyclical nature of pay-outs.” As well as the possibility of greater restraint on high pay.
The six female FTSE 100 CEOs are:
- Dame Carolyn McCall, CEO of ITV
- Emma Walmsley, CEO of GlaxoSmith
- Alison Brittain, CEO of the Whitbread group
- Olivia Garfield, CEO of Severn Trent
- Alison Cooper, CEO of Imperial Tobacco
- Veronique Laury, CEO of Kingfisher
Discussing the news that CEO pay has decreased, Peter Cheese, chief executive of the CIPD said:
Fairness is one of the biggest challenges facing society today. The gulf between the pay at the top and the bottom ends of companies is slightly smaller this year but it’s still unacceptably wide and undermines public trust in business. We must question if CEOs are overly focused on financial measures and are being incentivised to keep share prices high rather than focusing on the long-term health of their business. Being a custodian for the business and its people over the longer term must surely be a chief executive’s ultimate duty, rather than simply focusing on short-term gain.
Pensions also add to CEOs pay and make up a large proportion of their executive award, as CEOs get a pension contribution worth 25 per cent, where as employees receive a contribution of 8 per cent of their wages.
Clare Parkinson, reward business manager at Croner, a HR, health and safety, tax and reward expert said:
It is generally accepted that CEOs and business leaders will receive greater remuneration than the average employee, however organisations are facing an increasing amount of scrutiny in this regard. This is especially common for those who pay the majority of their staff in and around the National Minimum Wage and it is important that pay practices remain fair and proportionate throughout.
The trend in recent times has been to encourage employers to take a more holistic approach to managing their organisations, ensuring the success and prosperity of the business can be shared by the entire workforce. This isn’t to say that CEOs should forego their salary and give all staff a substantial pay rise, but rather take a look at where funds previously used for things such as excessive bonus payments could be better spent improving the business and helping to create a more positive company culture.