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It’s Fat Cat Day - Thursday Jan 4 2018

On Thursday Jan 4th, the typical FTSE100 chief executive will already have "earned" what it will take the average UK employee all year to earn


Thursday 4th January 2018 is “Fat Cat” Thursday. In just three working days, the UK’s top bosses will have made more money than the typical UK full-time worker will earn in the entire year, according to calculations from independent think tank The High Pay Centre, and the CIPD, the professional body for HR and people development.

The figures show that pay for top executives will pass the median UK gross annual salary of £28,758 for full-time employees on Thursday 4th January 2018.

The CIPD and High Pay Centre’s calculations come in a year which saw the mean FTSE 100 CEO pay packet fall by a fifth, down from £5.4m million to £4.5 million. FTSE 100 CEO median pay also fell to £3.45 million in 2016 (down from £3.97m in 2015). However, despite this year-on-year reduction in total pay among FTSE 100 bosses, the ratio of CEO pay to the pay of the average full-time worker stands at 120:1.

The High Pay Centre and the CIPD are working together to ensure that high pay is addressed as part of a much broader review of corporate governance in the UK, including greater transparency on workforce data.

Stefan Stern, director of the High Pay Centre, said: “While it was encouraging to see a tiny amount of restraint on pay at the top of some FTSE100 companies last year, there are still grossly excessive and unjustifiable gaps between the top and the rest of the workforce. Publishing pay ratios will force boards to acknowledge these gaps. We look forward to working with business and government to make this new disclosure requirement work as effectively as possible.”

Peter Cheese, chief executive of the CIPD, said: “The drop in pay in the last year is welcome, although relatively marginal, and will have largely been driven by the growing public and shareholder concerns and the Prime Minister’s stronger focus on boardroom excess and plans to reform corporate governance. To ensure this year’s fall in CEO remuneration isn’t just a blip on the consistently upward trend of recent years, it’s crucial that the Government keeps high pay and corporate governance reform high on its agenda. We also need business, shareholders and remuneration committees to do their part and challenge excessive pay, to understand pay and reward for top executives in the context of the whole organisation, and look at how pay is linked to driving sustainable performance. We need a significant re-think 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.

“The current review of the UK Corporate Governance Code provides a great opportunity to consider these issues. In particular, it should broaden Board focus and the remit of remuneration committees to ensure there is much more understanding of the wider workforce and corporate cultures, and in particular how to engage employee voice and improve fairness and transparency.”

Charles Cotton, Senior Reward and Performance Adviser at the CIPD, said: “When considering executive and employee pay, reward decisions must be principles-led, evidence based and outcome-driven. It should be aligned to both financial and non-financial measures of business success, reflecting both short and long-term performance. Executive pay should also be considered alongside how the wider workforce is being rewarded. In a year when real earnings will have fallen for many, excessive reward at the top will be strongly felt by the rest of the workforce.” 

Previous CIPD research has shown that excessive CEO pay can have a damaging effect on the workforce. In its 2015 research report ‘The view from below: What employees really think about their CEO’s pay packet’, a CIPD survey of more than 1000 working adults found that:
• 71% agreed that CEO pay levels in the UK are generally too high
• 60% agree that CEO pay levels in the UK demotivate employees
• 54% agree that CEO pay levels in the UK are bad for an organisation’s reputation

As part of efforts to enhance trust in business and improve corporate governance in the UK, the CIPD and High Pay Centre recently welcomed the Government’s corporate governance reforms and the Financial Reporting Council’s proposals for a revised UK Corporate Governance Code. As part of the Government’s reforms, new laws will require around 900 listed companies to annually publish and justify the pay ratio between chief executives and their average worker.

The reforms also include the introduction of the world’s first public register of listed companies where more than a fifth of investors have objected to executive annual pay packages The first public register was published by the Investment Association on December 19 2017 and includes more than a fifth of the FTSE 100. Companies on the register include fashion label Burberry, retailers Sports Direct and Morrisons, broadcaster Sky and the advertising company WPP.


Methodology and stat summary

• The median pay for a FTSE 100 CEO in 2016 was £3.45 million, based on the publicly disclosed “single figure” measure. Source: (this compares to £3.97m in 2015)
• Median earnings for full-time workers in the UK were £28,758 in 2017 (£550 per week).
• The CEO to average worker ratio of 120:1 is based on figures from the ONS Annual Survey of Hours and Earnings 2017 This is the latest figure available. The 122:1 figure CIPD and the High Pay Centre referenced quoted in its August 2017 report was based on 2016 data.
• The ‘Fat Cat Thursday’ calculation is based on the assumption that FTSE 100 CEOs work 12 hours a day, including three out of every four weekends, and take only 19 days holiday per year – i.e. 320 days of work a year, or 3,840 hours. This works out at pay of £898 per hour, meaning that it would take around 32 hours’ work to reach the UK median earnings figure of £28,758. They would hit this some time on Thursday 4th January 2018, assuming they begin work for the year on Tuesday 2nd January 2018.
• Last year’s Fat Cat Wednesday was based on the median pay for a FTSE 100 CEO of £3.973 million, based on the publicly disclosed “single figure” measure. This was compared to median earnings for full-time workers in the UK being £28,200 in 2016). See:


The 10 highest paid CEOs in 2016 and 2015 were as follows:

2016                                                                           2015
Chief Executive Company  Total pay (£000)              Chief Executive Company Total pay (£000)
1 Sir Martin Sorrell WPP £48,148                              Sir Martin Sorrell WPP £70,416
2 Arnold Donald CARNIVAL £22,359                        Tony Pidgeley BERKELEY GROUP £23,296
3 Rakesh Kapoor RECKITT BENCKISER £14,609   Rakesh Kapoor RECKITT BENCKISER £23,190
4 Pascal Soriot ASTRAZENECA PLC £13,389         Jeremy Darroch SKY* £16,889*
5 Erik Engstrom RELX £10,563                                 Flemming Ornskov SHIRE £14,638
6 Bob Dudley BP PLC £8,399                                    Bob Dudley BP 13,296
7 Albert Manifold CRH PLC £8,045                            Erik Engstrom RELX 10,869
8 Nicandro Durante BAT £7,630                                Mike Wells PRUDENTIAL 10,031
9 Flemming Ornskov SHIRE PLC £7,504                  Michael Dobson SCHRODERS 8905
10 Ben Van Beurden ROYAL DUTCH SHELL £6,925 Antonio Horta Osorio LLOYDS GROUP 8773

*The data for Sky show a one year figure within a scheme that pays out biannually, meaning one year “spikes” and the next year reduces significantly.

Previous CIPD and High Pay Centre research on executive pay:

1. Executive pay: review of FTSE 100 executive pay packages (3 August 2017, CIPD in partnership with the High Pay Centre)
2. The view from below: What employees really think about their CEO’s pay packet (1 Dec 2015, CIPD)
3. Fat Cat Wednesday 2016 (4 Jan 2017, High Pay Centre):

Posted on 3 January 2018

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