According to the latest calculations
Thursday 4 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. This is 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 4 January 2018.
The CIPD and the 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.
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.”