The present FTSE 100 Chief Executive Officer median pay (not including pension) has been calculated as £3.81 million ($4.84 million), which is 109 times higher than the pay of a median full-time employee, which is £34,963. On Thursday, the Trades Union Congress (representing 48 unions in the U.K.), declared the pay disparity to be "excessive" and accused the Conservative party of creating such immense levels of inequality.
The High Pay Centre think tank estimates that by 1 pm London time on Thursday, the average FTSE 100 CEO will have earned more money this year than the median full-time worker's annual salary, one hour earlier than in 2023. Their data, based on the most recent available CEO pay figures from British blue chip companies and government statistics regarding salaries, claims that the median FTSE 100 CEO pay (minus pension benefits) amounts to £3.81 million ($4.84 million), 109 times more than a median full-time worker's salary of £34,963. This marks a 9.5% increase since March 2023, while the median worker's pay has risen by only 6%.
Luke Hildyard, Director of the High Pay Centre, remarked, "Throughout 2023, big business and financial services lobbyists argued that top earners in Britain don't get sufficient pay and that people are overly concerned with the disparity between the wealthy and everyone else. When policymakers heed this flawed reasoning, wealth disparity and stagnant wages for the masses naturally ensue." As recently as December, Legal and General Investment Management altered their executive pay guidelines, allowing companies they invest in to distribute more generous incentives.
In May, London Stock Exchange CEO Julia Hoggett commented that executive pay levels were too low and could diminish the U.K.'s capacity to bring in and maintain top domestic and international talent, thus endangering the economy. She noted that "often the same proxy agencies and asset managers that oppose compensation levels in the UK support much higher compensation packages in different jurisdictions, notably in the U.S." According to the American Federation of Labor and Congress of Industrial Organizations, the pay for CEOs in the S&P 500 averaged $16.7 million in 2022, while regular workers made an average of $61,900. Hoggett insisted that a "constructive discussion" was needed in order for the U.K. to stay competitive in the global market.
The Trades Union Congress also relayed their discontent over the "obscene levels of pay inequality" in the U.K. TUC General Secretary Paul Nowak declared on Thursday that while British workers have experienced the longest wage cut in modern times, City executives have been allowed to take in humongous increases and bankers have been given infinite bonuses. A spokesperson from the U.K. Treasury was not available for a statement when reached out to by CNBC.
The cost of living has declined drastically since the last two years, and taxes have risen to a post-war high of 37.7% of gross domestic product in 2028/29, as suggested by the Office for Budget Responsibility. Regardless of the recent diminishment to National Insurance tax on employees,strict criticism from Unite,one of the largest unions in the U.K. with over 1.2 million members, remains. According to Unite General Secretary Sharon Graham, "These CEOs need to get their snouts out of the trough and give their employees a proper piece of the pie."
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