Pay gap widens as UK bosses get 130 times average worker’s salary

The pay gap between UK company bosses and average workers reached its widest point in eight years, with chief executives earning 130 times the salary of the typical full-time employee. This figure marks a slight increase from the previous year's ratio of 124, reflecting a growing disparity that has sparked renewed calls for reform. According to data published by the High Pay Centre, the median pay for FTSE 100 chief executives reached £5.06 million in the last financial year, representing an 8.6% increase compared to the previous year. This is the highest recorded level for executive compensation in the dataset. The trend of rising executive pay has continued since the pandemic, though some CEOs saw reduced salaries during the initial lockdown period due to decreased business activity. The High Pay Centre noted that the total amount spent on executive pay by FTSE 100 firms amounted to £856.6 million in the last financial year, a decrease from £1 billion in the prior report. This drop was attributed to the unusually high pay award of £212 million given to Melrose Industries' executives the previous year, following the company's acquisition of GKN for £8 billion in 2018. Despite this reduction, sixty-six of the ninety-four large listed companies increased their chief executives' pay packages compared to the previous year. The mean long-term incentive payment (LTIP) for executives rose by a fifth to £2.7 million, while the mean short-term incentive payment (STIP) increased by 14% to £1.8 million. These figures highlight the ongoing trend of increasing financial incentives for top management, even amid broader economic challenges. Among the highest-paid executives, Pascal Soriot, chief executive of AstraZeneca, earned £17.7 million, making him the highest-paid boss in the FTSE 100. Soriot has held this position for three of the last four years, though he was surpassed by Melrose Industries' executives in the previous report. Emma Walmsley, former chief executive of GlaxoSmithKline, ranked second with a £15.6 million pay package, which saw a nearly 50% increase in her final year in charge. Other notable figures include CS Venkatakrishnan, chief executive of Barclays, who earned £15 million after EU rules restricting bonus payments were lifted for UK banks. This marked the largest package for a Barclays CEO since 2011. Shell's Wael Sawan received a 60% pay raise to £13.7 million, despite a decline in company profits, while Bill Winters, chief executive of Standard Chartered, earned £12.7 million. The High Pay Centre emphasized that the current level of executive pay represents a significant financial burden on companies, potentially detracting from resources available for wage increases for other employees. The thinktank, which has been active since 2011, is set to close after 15 years of advocating for more equitable pay structures. As the new prime minister, Andy Burnham, prepares to take office, he has expressed support for addressing issues of high and excessive pay. His administration has pledged to provide relief to households facing the rising cost of living, suggesting potential policy changes aimed at narrowing the wealth gap.