British CEOs earn more in 4 days than workers do in a year

This article is more than 12 months old

LONDON Bosses at Britain's largest public companies will have on average made more money in the first four days of this year than what typical workers earn annually, according to independent calculations released yesterday.

Think-tank High Pay Centre and human resources body Chartered Institute of Personnel and Development (CIPD) have dubbed Jan 4 "Fat Cat Thursday" to mark their findings.

They reported the mean pay of chief executives at companies listed on the London Stock Exchange's benchmark FTSE 100 index will pass employees' median yearly salary of £28,758 (S$52,000) during the day.

Although they noted executive pay has fallen amid "modest" restraint by company boards, the study's authors warn the pay gap between top and average workers "remains wide".

"While it was encouraging to see a tiny amount of restraint on pay at the top of some FTSE 100 companies last year, there are still grossly excessive and unjustifiable gaps between the top and the rest of the workforce," said Mr Stefan Stern, director of High Pay Centre.

"Publishing pay ratios will force boards to acknowledge these gaps."

The average pay of the chief executives had dropped by a fifth through 2016 to £4.5 million, according to the figures published by the think-tanks.

However, that remains 120 times more than an average full-time worker's salary, a slight drop on the ratio of 122-1 of the previous year.

"We need a significant rethink on how and why we reward CEOs, taking into account a much more balanced scorecard of success beyond financial outcomes, looking more widely at the impacts of businesses on all stakeholders from employees to society more broadly," said Mr Peter Cheese, chief executive of the CIPD.

The two groups said they were working together to push for high pay to be addressed as part of a broader review of corporate governance in Britain, including greater transparency on workforce data. - AFP