Happy Fat Cat Thursday – your boss has already made more than your annual salary
We’re only on the fourth day of 2018 – but your boss would have already earned more in 2018 than you will for the entire year.
Obviously this doesn’t apply to all bosses and situations, but it’s most likely the case if you work for a FTSE 100 company.
Although the average pay of chief executives in these companies fell by a fifth last year, from £5.4million to £4.5million, this is still 120 times more than an average full-time worker. The median annual salary of employees is £28,758.
Because of this fact, today has been dubbed Fat Cat Thursday.
The High Pay Centre think tank and the Chartered Institute of Personnel and Development (CIPD) said there had been ‘modest’ restraint by company boards, but the pay gap between the top and average workers remained wide.
All listed companies will now have to publish the pay ratio between bosses adn workers under new corporate governance reforms this year.
Stefan Stern, director of the High Pay Centre, said: ‘While it was encouraging to see a tiny amount of restraint on pay at the top of some FTSE 100 companies last year, there are still grossly excessive and unjustifiable gaps between the top and the rest of the workforce.
‘Publishing pay ratios will force boards to acknowledge these gaps. We look forward to working with business and government to make this new disclosure requirement work as effectively as possible.’
Peter Cheese, chief executive of the CIPD, added: ‘The drop in pay in the last year is welcome but will have largely been driven by the Prime Minister’s proposed crackdown on boardroom excess.
‘It’s crucial that the Government keeps high pay and corporate governance reform high on its agenda, but we also need business, shareholders and remuneration committees to do their part and challenge excessive pay.
‘We need a radical rethink on how and why we reward chief executives, taking into account a much more balanced scorecard of success beyond financial outcomes and looking more broadly at areas like people management.
‘The current review of the UK Corporate Governance Code provides a great opportunity to broaden the remit of remuneration committees to ensure that there is much more focus on the wider workforce and employee voice when decisions on chief executive pay are being made, to improve fairness and transparency.’
The study of company annual reports found that Sir Martin Sorrell, chief executive of advertising giant WPP, was the highest paid boss for the second year, although his total pay fell from £70.4 million to £48.1 million.
He was followed by Arnold Donald of cruise company Carnival (£22 million), Rakesh Kapoor of consumer goods company Reckitt Benckiser (down from £23.1 million to £14.6 million), Pascal Soriot of pharmaceutical firm Astrazenica (£13.3 million) and Erik Engstrom of information firm Relx (£10.5 million).