Chief Execs will earn more in 2016 by today than an employee's average annual salary
Top executives will have been paid more than the average annual salary of a worker by today, dubbed Fat Cat Tuesday, according to a new study. Calculations by the High Pay Centre think tank showed that the pay of company executives returning to work in the new year will pass the UK average salary of £27,645 by late afternoon on Tuesday.
FTSE 100 chief executives were paid an average £4.96 million a year in 2014, and the report found that even if they are assumed to work long hours with few holidays, this is equivalent to hourly pay of more than £1,200.
The typical value of a FTSE 100 chief executive incentive award increased by nearly 50% of salary since the previous year, while the annual pay of the average UK worker increased by just £445, from £27,200 to £27,645 in 2015, said the think tank.
The High Pay Centre said the figures will raise doubts about the effectiveness of government efforts to curb top pay by giving shareholders the power to veto excessive packages.
The High Pay Centre called for further measures to be taken, such as representation for workers on company remuneration committees that set executive pay, and publication of the pay gap between the highest and median earner within a firm.
High Pay Centre director Stefan Stern said: “Fat Cat Tuesday again highlights the continuing problem of the unfair pay gap in the UK.
“We are not all in this together, it seems. Over-payment at the top is fuelling distrust of business, at a time when business needs to demonstrate that it is part of the solution to harsh times and squeezed incomes, and is promoting a recovery in which all employees can benefit.”
Seema Malhotra, shadow chief secretary to the Treasury, said: “The widening gap between FTSE 100 chief executives and the majority of British workers shown by the High Pay Centre’s report is shocking.
“There is growing public concern about rising inequality and its impact on our social fabric. Such a gap cannot be right for Britain or for our long-term economic stability.”
TUC General Secretary Frances O’Grady said: “Every worker deserves a fair share of the wealth they help create. But the average weekly wage is still worth £40 a week less than before the financial crisis.
“The Government must start making the right choices to deliver a fair economy with fair pay, like giving workers more collective pay bargaining rights.”