Chief executive average pay rises by 11% to £4M: Compared with just 2% for workers
Chief executive pay rose by 11% last year to almost £4m – much higher than rises for workers, a new report found. The rise came despite criticism from investors and government about excessive salaries, the Chartered Institute of Personnel Development (CIPD) said.
The highest total payout was £47.1m for Jeff Fairburn, chief executive of housebuilder Persimmon. The GMB union called the findings a “badge of national shame”.
According to the CIPD, the median pay for FTSE 100 chief executives was £3.93m last year, up from £3.53m in 2016. That compared with a 2% increase for UK workers as a whole, it said.
The HR industry group also found bosses were paid on average 145 times more than their employees – up from 128 times in 2016.
John McDonnell, the shadow chancellor, said most workers’ wages were still below 2010 levels and were barely keeping up with inflation.
“When they see the fattest cats get fatter yet again with an 11% pay rise, it’s no wonder people question the fairness of our society,” he said.
Tim Roache, GMB general secretary, said the figures exposed the “shocking excess” in UK boardrooms.
“We live in a country where company fat cats get paid 400 times more than the dedicated, hard-working carers who look after our nearest and dearest – not to mention hundreds of times more than those who keep our streets clean, or ambulance workers who save lives.”
In June, the government said all companies with more than 250 employees would be required to publish their pay ratios.
Unions want ministers to go further, guaranteeing worker representatives on companies’ executive pay committees.
It follows concerns some bosses have been getting pay packages out of step with company performance. Shareholders have also become more critical, staging a rash of revolts at firms such as Royal Mail, Persimmon and advertising giant WPP.
A Department for Business spokesman said: “While most companies get their responsible business practices right, we understand the anger of workers and shareholders when bosses’ pay is out of step with company performance.
“That is why as part of our corporate governance reforms, the UK’s largest companies now have to ensure employees’ interests are represented in the boardroom and annually publish and explain the pay ratio between senior management and the workers.”