What cost of living crisis? That is the reality for Britain’s top bosses, who will have earned £27,000 in 2015 by the time they break for their tea and biscuits on Tuesday afternoon.
(Image: High Pay Centre)
In what it has dubbed Fatcat Tuesday, the High Pay Centre says the average FTSE 100 chief executive earns more in two days than the average annual salary of £27,000 and will have surpassed this sum by the late afternoon of 6 January.
The think tank, which monitors top pay, says this equates to hourly pay of almost £1,200 – and that is assuming chief executives put in 12-hour days, work three weekends in four and take just 10 days of holiday a year.
The High Pay Centre has calculated that it took a chief executive a day longer last year to earn the average annual salary, and that top people’s pay has risen by £500,000 since 2014, compared with a £200 rise for the average worker.
High Pay Centre Director Deborah Hargreaves said: “‘Fatcat Tuesday’ highlights the problem of unfair pay in the UK. For top bosses to rake in more in two days than their staff earn in a year is clearly unfair, disproportionate and doesn’t make social or economic sense.
“Politicians need to do more to stand up to big business and the super rich. We must also give workers the power to force employers to share pay more fairly throughout their organisation.”
But figures compiled by the analysts Manifest show that, over recent years, FTSE 100 chief executives’ pay and benefits packages have not been rising as a multiple of their employees’ wages.
While these chief executives were awarded on average 119 times as much as their staff in 2004, by 2013-14 this had fallen to 113 – albeit after hitting a high of 151 in 2007, before the financial crisis.
Manifest says shareholder pressure and regulatory change are responsible for this, but its figures show that while the average chief executive’s total package was almost £4m in 2013-14, average staff pay was about £35,000.
Sam Bowman, deputy director of the free-market think thank, the Adam Smith Institute, said: “Considering how important the decisions made by CEOs are to their firms’ success, it would be very strange if they were not paid very highly.
“Multi-billion pound firms can live or die based on the choices their directors make – a Steve Jobs can turn a firm into a world leader, while a bad CEO can ruin a thriving company. Think of how important it is for Tesco to make the right strategic decisions in the coming years. It is no surprise that it is willing to pay well for the best CEO it can find.”
The High Pay Centre says the gap between the richest and poorest has widened over the last 30 years, with the share of income going to the top 1 per cent doubling from 6-14 per cent.