Wage gulf remains despite drop in pay for bosses of top UK firms

BOSSES at Britain’s biggest firms are taking home smaller pay packages on average, but their remuneration still massively outstrips that of the average worker, new research has shown.

Chief executives at FTSE 100 companies were paid £3.46m in 2018 on a median basis, down 13% compared with £3.97m the previous year, according to the latest CIPD and High Pay Centre analysis.

This means CEO pay is round 117 times that of the average UK full-time worker, who makes £29,574 per year.

In mean terms, the average pay package was £4.7m, down 16% on last year.

CIPD chief executive Peter Cheese said: “The gulf between the pay at the top and the bottom ends of companies is slightly smaller this year, but it’s still unacceptably wide and undermines public trust in business.

“We must question if CEOs are overly focused on financial measures and are being incentivised to keep share prices high rather than focusing on the long-term health of their business.”

The research noted that the decline might show greater restraint on high pay, but it could also be linked to a lull in the cycle of payouts from long-term incentive plans (LTIPs).

Of the 100 bosses, 43 saw their pay increase last year, with LTIPs accounting for the largest component of executive remuneration.

Meanwhile, gender diversity efforts appear to have yielded little in terms of results, with bosses still more likely to be called Stephen or David than be a woman.

Female chief executives are also taking home less of the £465.4m total payout to FTSE 100 bosses than their some of their male counterparts.

Women made up 6% of blue-chip CEOs but earned just 4.2% of the total pay.

Luke Hildyard, director of the High Pay Centre, commented: “There is still more to be done to align pay practices with the interests of wider society and give the public confidence that our biggest businesses are working for the good of the economy as a whole rather than the enrichment of a few people at the top.”