Thursday, August 17

‘160 years’ to earn average pay of top bosses

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It would now take the typical UK worker 160 years to rake in the average annual amount handed to a FTSE 100 boss, according to a study.

The report, by the High Pay Centre pressure group and the Chartered Institute of Personnel and Development (CIPD), said it represented an increase of 20 years on the pay gap in 2015.

It blamed the largely stagnant nature of pay growth for the rise, with its analysis suggesting the gulf was widening despite a marked fall in the total awards received by the chief executives as boardrooms come under pressure.

The annual study found average packages dropped from £5.4m in 2015 to £4.5m at a time when the median award of the full-time UK worker was £28,000.

The six women in the list got an average of £2.6m – well below that of their male counterparts.

The best paid boss, by some margin, was the founder and chief executive of advertising powerhouse WPP, Sir Martin Sorrell, who received £48.1m in wages and awards.

That sum, however, was markedly lower than the £70.4m he took home the previous year – one that prompted the company to rearrange his earnings potential following a shareholder backlash.

The study credited political and institutional investor pressure for the wider fall in average awards.

It noted that the pay ratio between a FTSE 100 boss and one of their own employees was 129:1 – down from 148:1.

But High Pay Centre director, Stefan Stern, said: “The response has been limited and very late.

“It is also, so far, a one-off. We need to see continued efforts to restrain and reverse excess at the top, and we should beware the ratcheting up of pay lower down the FTSE league table as chief executives and remuneration committees ‘chase the median’.

“This helps nobody but a few lucky top execs.”

Theresa May put tackling boardroom excess near the top of her agenda when she first stepped into Number 10.

The general secretary of the GMB union, Tim Roache, described the figures as “scandalous”.

He said: “Working people create the wealth in this country and they are sick and tired of fat cat bosses getting all the cream, especially when everyone else suffers squeezed living standards.”

Business Minister Margot James responded: “This report shows encouraging signs that the UK’s largest firms are already making progress in this area and our responsible business reforms, which we will publish shortly, will help to enhance the public’s trust and confidence in big business.”

:: The best-paid FTSE 100 chief executives in 2016:

1. Sir Martin Sorrell, WPP, £48.1m.
2. Arnold Donald, Carnival, £22.4m.
3. Rakesh Kapoor, Reckitt Benckiser Group, £14.6m.
4. Pascal Soriot, AstraZeneca, £13.4m.
5. Erik Engstrom, RELX, £10.6m.

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