Chief executives of the UK’s 100 biggest companies have seen their pay jump by 39% to an average of £3.4m, according to research by the High Pay Centre thinktank and the Trades Union Congress (TUC).
The median average pay of CEOs of companies in the FTSE 100 index rose to £3.4m in 2021, compared with £2.5m in 2020 during the height of the coronavirus pandemic when many bosses took a voluntary pay cut as they placed millions of employees on furlough. CEO pay has also surpassed the £3.25m median recorded in 2019, before the pandemic.
The jump in executive pay means that the average UK CEO now collects 109 times that paid to the average British worker, up from 79 times in 2020.
Frances O’Grady, the general secretary of the TUC, said the growing disparity between pay at the top and that paid to workers is fuelling the cost of living crisis.
“Workers deserve a fair share of the wealth they create. But right now, CEO pay is soaring while working people experience the biggest real wage falls in 20 years, she said. “These unbalanced pay policies have seen the gap widen between workers and bosses this year, adding to the cost of living crisis.
O’Grady called on the government to introduce tough rules to “rein in executive pay”. “This should include worker representatives on the committees that set top pay, and elected seats for workers on company boards,” she said. “This approach is already commonplace in many countries and works very well. The government should give UK workers this opportunity too.”
The data also shows that FTSE 100 CEOs’ annual bonuses jumped to £1.4m compared with £828,000 in 2020. Nine in 10 of the bosses received a bonus.
In total, the FTSE 100 firms spent more than £720m on pay awarded to 224 top executives. The figures are based on pay disclosures made in annual reports, for companies’ financial years ending in 2021, the most recent available.
Luke Hildyard, director of the High Pay Centre, said: “Very high executive pay is a big part of the cost of living problem. If large employers are paying millions more to already very wealthy executives, that makes it harder to fund pay increases for low and middle income workers.
“If incomes in the UK were shared more evenly, that would significantly raise the living standards of the people hit hardest by the current economic crisis, while those at the top probably wouldn’t notice much difference to their lifestyles.”
The highest paid FTSE 100 CEO, according to the research, was Sebastien De Montessus of Endeavour, which operates goldmines in Côte d’Ivoire, Burkina Faso and Senegal. He was paid £16.9m.
The second-highest paid boss was Pascal Soriot of AstraZeneca, who was paid £13.9m.
The TUC and the High Pay Centre are calling for reforms to regulations affecting corporate pay-setting processes, including:
Requirements for companies to include a minimum of two elected workforce representatives on the remuneration committees that set pay
Guaranteed trade union access to workplaces to tell workers about the benefits of union membership and collective bargaining.
Requirements for companies to provide more detailed disclosure of pay for top earners beyond the executives, and low earners including indirectly employed workers, enabling more informed pay negotiations at individual companies and a clearer debate about pay inequality more generally.
