Salary rise of top UK CEOs more than double inflation rate
CHIEF executives running London’s biggest-listed companies have seen their pay increase by more than double the rate of British annual inflation, as executive bonuses soar, a survey revealed.
Total compensation for CEOs at FTSE 100 firms jumped nearly 22% to an average of 3.9 million pounds ($4.5 million) in 2021/22 compared with the previous 12-month period, accountants PwC revealed Monday.
The U.K. annual inflation stands at a four-decade high above 10%, while a majority of the country’s workers are receiving pay increases far below this level.
“The increase in executive pay and bonuses highlights that FTSE 100 companies were boosted by businesses opening up and demand returning after the pandemic,” said Andrew Page, executive compensation leader at PwC UK.
“However, looking forward... higher pay outcomes are likely to be met with greater investor scrutiny, particularly in the context of rising inflation and pay increases across the workforce.” Workers across various sectors have gone on strike across Britain this year in a bid to secure pay rises matching inflation.
Railway workers have called off their latest industrial action, however, in the hope of securing a deal deemed acceptable to thousands of workers.
At the same time, teachers and nurses are threatening walkouts.
“Over the past decade or so, investors have started to take a tougher line on executive pay,” a lobby group campaigning for fair pay for all workers said in reaction to the CEO pay report.
However, the High Pay Centre also told Agence France-Presse (AFP) that pay awards of 3-4 million pounds for most FTSE 100 chief executives “amount to pay over 100 times that of the typical U.K. worker, historically very high in the context of the past halfcentury.
“The effect of investor scrutiny has been to contain pay gaps rather than significantly reduce them,” it added.
CEO pay was cut or frozen during the height of the pandemic as companies, such as British Airways parent IAG, suffered heavy losses due to lockdowns.
Others listed on the benchmark FTSE 100, notably supermarkets including Britain’s biggest retailer Tesco, enjoyed soaring profits.
PwC added the proportion of CEOs with salary freezes this year fell to 15% from 43%.