The top bosses of the largest companies in the UK will have earned more than the average worker does for the year by lunchtime on Thursday, according to research by the High Pay Centre. It says that by 13:00 GMT, the pay of FTSE chief executives will have overtaken the median UK annual wage of £34,963 for full-time workers. This means that these bosses will have made more in one month than a typical worker will in a whole year. The average pay of top bosses, including pensions, is £3.81m per year, equating to £1,170 per hour, which is 109 times more than the average full-time worker.
The median yearly pay of executives at firms listed on the bigger FTSE 350 is £1.32m. Therefore, they will need to work until 10 January to surpass the median UK worker’s annual pay. Meanwhile, leading bankers will overtake the average worker’s pay on 17 January. The calculations are based on salaries disclosed in firms’ annual reports.
The Trades Union Congress (TUC), representing 48 unions, stated that the data is a sign of “obscene levels of pay inequality” faced by the UK. The CBI trade body, which represents a number of listed companies, was invited to comment but declined to do so. Luke Hildyard, director of the High Pay Centre, highlighted that these figures reveal any claims that top earners in the UK are not paid enough are inaccurate.
In 2023, leading business and finance figures called for higher pay for CEO’s. They pointed to more significant compensation in other countries such as the US, where the median pay for S&P 500 bosses was over $14m in 2022. Furthermore, Legal and General Investment Management modified its executive pay policies in December allowing firms in which it invests to extend rewards and incentives. However, the head of the London Stock Exchange stated that insufficient pay levels for CEO’s create a risk to the UK economy.
The High Pay Centre calculations assume that CEO’s work for 62.5 hours each week, based on a study by Harvard Business School in the US. This totals 12.5 hours a day, not including weekends and bank holidays within England and Wales, which is how the think tank calculated the hourly pay of £1,171
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