Blog: The average CEO-worker pay ratio is down – so are shareholders winning the debate?
The average CEO-worker pay ratio is down – so are shareholders winning the debate against excessive pay?
Ashley Walsh, head of policy and research at The High Pay Centre, says NO.
Shareholders aren’t just losing the debate against high pay. They’re not even bothering to fight it. Five years after the coalition government gave shareholders a veto over top pay, they’ve meekly waved through every single FTSE 100 pay policy.
One swallow does not a summer make. Top pay fluctuates with stock market trends – it is nothing to do with executive performance.
Meanwhile, in the biggest wage squeeze since the Napoleonic Wars, the average worker earns in one year what the typical FTSE 100 chief exec trousers in two days. Companies lavishing millions on top executives and senior managers leaves peanuts for the rest
Those who accept such grotesque inequality exaggerate the influence of individuals in large, long-established firms. If such influence exists at all, it reflects poor succession planning.
Chief executives are not worth 117 times the average worker. They’re bunged for being in the right place at the right time, while their staff slog away, driving profits, innovation and productivity.
Ashley Walsh is Head of Policy and Research at the High Pay Centre.
This blog post originally appeared in City AM
Since 1 January 2020 the average FTSE 100 CEO has earned:
Income inequality in the UK
Wealth inequality in the UK
- High Pay Centre Briefing: Corporate Response to the Economic Shutdown
At least 18% of FTSE 100 firms are using the UK Government's furlough scheme. 37% have cut executive pay and 33% are withdrawing or withholding dividend payments
- Blog: we can’t do more for low-paid workers without tackling excess pay at the top
recognition of low-paid workers is welcome, but for things to change, we need tough choices not warm words. Changes to corporate governance structures, stronger trade union rights and more progressive taxation
- Conditions are critical: publicly-funded bail-outs for private companies
Government bail-outs of large businesses affected by the coronavirus must include social and environmental conditions including fair pay, fair tax contributions and worker representation on company boards