Top UK CEOs earn 120 times as much as a typical UK worker and will have out-earned the average Brit’s annual wage by Wednesday.
FTSE 100 (^FTSE) CEO’s earnings for 2021 will surpass the median annual wage for a full-time worker in the UK by 5.30 pm on Wednesday (6 January), think tank High Pay Centre said.
It came as the think tank published its annual review into executive pay. The average FTSE 100 chief executive made £3.6m last year, the think tank said, compared to £31,461 ($42,814) for the average UK worker.
“The increasing role played by the finance industry in the economy, the outsourcing of low-paid work and the decline of trade union membership have widened the gaps between those at the top and everybody else over recent decades,” said High Pay Centre director Luke Hildyard.
The High Pay Centre said CEO pay was flat compared to last year, while pay for UK workers increased slightly. It meant chief executives had to work 34 hours of 2021 to surpass average earnings, compared to 33 hours in 2020.
“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,” 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.”
The calculations are based on analysis of corporate annual reports. The High Pay Centre said the data did not reflect the impact of the coronavirus pandemic. The Institute for Fiscal Studies and Nobel Laureate Sir Angus Deaton’s review of inequalities said this week that COVID-19 has widened gaps between “the high- and low-paid”.
“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,” said Andrew Ninian, Director of stewardship and corporate governance at the Investment Association.
“Our members are calling on companies to ensure CEO pay is proportionate and aligned with performance, so that it reflects the experiences of employees, shareholders and other stakeholders."
WATCH: What is the Job Support Scheme and how has it changed?