The TUC warned directors’ pay at FTSE 100 firms has reached “stratospheric” levels, with top executives receiving a year’s worth of the minimum wage in just one day.
The research found that the average boss in that grade was paid 123 times the average full-time salary, with median pay awards soaring by 47% in the five years to 2015, to £3.4m, compared to 7% for ordinary workers during the same time frame.
It took Sir Martin Sorrell of advertising giant WPP, the UK’s highest paid chief executive, less than 45 minutes to earn what an average worker receives in a year, the TUC added.
“We’re seeing a growing disconnect between Britain’s boardrooms and shop floors when it comes to pay,” said TUC’ deputy general secretary Paul Nowak. “Over the last five years, Britain’s bosses have seen their pay rise by nearly 50%. And at the same time, ordinary working people have seen real terms pay freezes, and we think that’s unfair, it’s not right, and it’s not sustainable in the long term for the health of the economy.”
Frances O’Grady, called on the prime minister to “deliver on her promise to put workers on company boards”. She added: “This would inject a much-needed dose of reality into boardrooms and help put the brakes on the multimillion pay packages that have damaged the reputation of corporate Britain.”
Professor Andre Spicer of the Cass Business School in Oxford, said some firms are already under pressure to curb high managers’ pay: “We’re beginning to see disquiet amongst investors so there’s been pushback amongst big executive pay deals at places like Deutsche Bank, Burberry and others. So investors are beginning to become fed up with this. It’s likely that we’re
beginning to see questioning of this widespread practice, that CEOs need to be paid a lot to perform well.”