FTSE 100 bosses earn ‘183 times more’ than UK average
LONDON, United Kingdom (AFP) — The average pay of chief executives in Britain’s top companies is 183 times that of the typical worker, according to a study published Monday.
Research among the companies listed on the London stock exchange’s FTSE 100 index found that average pay reached £4.96 million (US$7.75 million) in 2014.
The figure is 183 times the earnings of average full-time workers, and up from 160 times in 2010 at £4.13 million.
The study by the High Pay Centre think tank found the 10 highest-paid chief executives received more than £156 million between them last year.
“Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives,” said High Pay Centre director Deborah Hargreaves.
“It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest.”
Since 2013, big companies have been obliged to be more transparent about the earnings of their bosses, who generally receive a base salary, bonuses, stock options and other compensation.
“These reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do,” said Hargreaves.
Shareholders can make their discord known, which happened at luxury fashion brand Burberry last year, when a majority voted against the chief executive’s pay packet.
However, only 6.4 per cent of stockholders voted against chief executives’ pay among the FTSE 100 companies.
“Inequality is reaching stratospheric levels,” said Frances O’Grady, general secretary of the Trades Union Congress.
“After years of falling living standards it is a disgrace that top execs are taking an even bigger share of the rewards of growth.
“Ordinary employees need to be included in workplace pay committees to add some common sense and reality to boardroom pay decisions.”
A spokesman for the Confederation of British Industry, the biggest business lobby, said high pay was “only ever justified by exceptional performance.”
“Shareholders now have a vote on companies’ pay policies and it is important that this is used effectively,” he told AFP.
