New High Pay Centre report: Executive pay continues to climb at expense of ordinary workers
FTSE CEO Pay jumped to £4.964 million in 2014
- FTSE 100 CEO Pay climbed to £4.964 million in 2014
- CEOs now paid approximately 183 times the average UK worker
- Top pay up significantly from £4.129 million in 2010
- Findings will create pressure for further action to reduce gap between the super rich and low and middle-income earners
FTSE 100 CEO pay jumped to £4.964 million in 2014 according to a new report published today by the High Pay Centre think-tank.
The figures represent a slight increase on CEO pay of £4.923 million in 2013, but a more drastic rise from the £4.129 million average in 2010.
The High Pay Centre analysed data disclosed in companies’ annual reports as a result of requirements introduced by the coalition government in 2013. The research also found that:
- The top 10 highest-paid CEOs alone were paid over £156 million between them
- Despite average CEO pay of nearly £5 million, only a quarter of FTSE 100 companies are living wage accredited
- Average FTSE 100 CEO pay in 2014 was 183 times the earnings of the average full-time UK worker, up from 182 times in 2013 and 160 times in 2010
- Shareholders have the power to voice their opposition to executive pay policy at company AGMs, but the average vote against pay awards across the FTSE 100 was just 6.4%
Commenting on the report, High Pay Centre Director Deborah Hargreaves said:
Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives. It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest
The Coalition Government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket. However it’s clear that these reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.
Notes to editors:
- The 2013 Enterprise and Regulatory Reform Act requires companies to publish a ‘single figure’ plus historic comparisons for CEO pay in their annual reports. The High Pay Centre analysed these figures to calculate averages for 2014, 2013 and 2010.
- Companies also disclose data on total pay and staff numbers to make it possible to create an approximate ratio for CEO to average employee pay. However inconsistent disclosure means this is a very imprecise figure. In the USA, the Securities and Exchange Commission ruled last week that companies would have to publish the pay ratio between their CEO and their median employee. The High Pay Centre and other organisations have repeatedly called for similar measures to be introduced in the UK and across the EU, as well as compulsory representation for ordinary workers on the ‘remuneration committees’ that set executive pay.
- As an alternative ratio, it is possible to compare CEO pay to that of the average full-time UK worker, based on figures in the Annual Survey of Hours and Earnings published by the Office for National Statistics
- Previous research by the High Pay Centre and by the TUC has highlighted the potential conflicts of interest involving remuneration committee members and the consultants who advise them. For more information, see https://www.tuc.org.uk/sites/default/files/Acultureofexcesspay2.pdf and http://highpaycentre.org/files/remuneration_consultants_-_FINAL.pdf
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