(Sharecast News) – Top bosses will be paid more in the first three days of 2021 than the average UK worker earns all year, according to research.
Chief executives of FTSE 100 companies will on average overtake the £31,461 annual median wage for full-time workers by 17:30 GMT on Wednesday, the High Pay Centre calculated.
Bosses of leading companies had to toil for an extra hour in 2021 to outstrip workers’ pay after average wages rose slightly while CEO pay was flat, the thinktank said.
Top CEOs earn about 120 times the pay of a typical UK worker – up from about 50 times at the turn of the millennium and 20 times in the early 1980s, the High Pay Centre said.
Bosses’ earnings were unchanged despite profit at many companies falling and the cancellation of or reductions to dividends. The High Pay Centre said it was too early to judge the effect of the Covid-19 crisis on pay gaps.
“These figures will raise concern about the governance of big businesses and whether major employers are distributing pay in a way that rewards the contribution of different workers fairly,” High Pay Centre director Luke Hildyard said. “They should also prompt debate about the effects that high levels of inequality can have on social cohesion, crime, and public health and wellbeing.”
Some top investors have urged companies to restrain executive pay with livelihoods threatened by the Covid-19 crisis. The pandemic has added to concerns about capitalism maintaining its legitimacy amid rising populism in many countries including the UK.
Andrew Ninian, governance chief at the Investment Association, which represents £8.5trn of assets, said: “With coronavirus continuing to impact our economy and society, executive remuneration will continue to be an important focus for investors in 2021. Investors expect companies to treat their executive directors and workforce consistently when it comes to pay and not to isolate executives from the impact of Covid-19.”
The Trades Union Congress said carers, shop workers and delivery drivers were at the forefront of keeping the country going during the pandemic and not CEOs and that the figures were a wake-up call for the government, which has promised to “level up” living standards in the UK.
Frances O’Grady, the TUC’s general secretary, said bosses’ pay “tells you everything you need to know about how unfair our economy is”.
Hildyard said top pay had rocketed due to factors such as the growth of the finance industry in the economy, the outsourcing of low-paid work and the decline in trade union membership. The thinktank made its calculations based on disclosures in annual reports and official figures about pay in the UK.
