Midland chief executives earn 50 times more than their staff
Pay revealed for bosses of region’s top listed firms – but it pales compared to FTSE 100
CHIEF executives in the West Midlands earn almost 50 times more than the average taken home by a full-time worker in the region.
Birmingham Post research of stock market-listed firms in the region shows the average boss picks up £1.23 million a year.
That compares to the average annual salary of £24,913 for a fulltime worker in the West Midlands – roughly two per cent of chief executives in the region.
However, the regional figure is dwarfed by the national position, with a new study showing FTSE 100 bosses earned almost £5 million a head last year, 183 times that of the average worker.
The data prompted calls
for action to curb executive pay. But Jason Wouhra, chairman of the Institute of Directors in the West Midlands, said firms had to pay the going rate to remain competitive.
Mr Wouhra, a director at East End Foods, said it was more important to see the pay of average workers in the West Midlands increased.
He said: “The average figure is lower in the West Midlands, which doesn’t surprise me. We have a lot of manufacturing businesses and traditionally they have less margin than some of the financial businesses on the FTSE 100. Chief executives are in a global jobs market – often they are courted in different countries – so their pay has got to be competitive globally. You also have to remember they carry a lot of responsibility – they have to make sure it is a successful business so everyone gets paid.
“But at the lower level, I agree it needs to be addressed. I’d like that figure – the average people earn in the West Midlands – to be larger.”
The Post looked at the accounts of 41 companies across the region listed on the London Stock Exchange.
It showed chief executives’ pay in the region varied from five figures to more than £6.5 million.
The best paid chief executive in the region was Martin Lamb, who has now retired as the top man at engineering giant IMI.
Only 16 of the 41 companies in the region paid their chief executive more than £1 million.
However, the country’s top 10 highest-paid chief executives were rewarded more than £156 million between them last year.
Research among FTSE 100 companies by the High Pay Centre think tank found that average pay jumped to £4.96 million in 2014, compared with £4.13 million in 2010.
High Pay Centre director Deborah Hargreaves said: “Pay packag- es of this size go far beyond what is sensible or necessary to reward and inspire top executives.
“It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest
“The coalition Government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket.
“However, it’s clear that these reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.”
The average pay ratio between FTSE 100 chief executives and the average wage of their employees was 148 last year, up from 146 in 2013. Only a quarter of the FTSE 100 firms are accredited to the Living Wage Foundation for paying the living wage, the report added.
TUC general secretary Frances O’Grady said: “With top bosses now earning 183 times more than the average full-time worker, inequality is reaching stratospheric levels.
“After years of falling living standards it is a disgrace that top execs are taking an even bigger share of the rewards of growth. We need a recovery that works for the many and not just the few.
“Ordinary employees need to be included in workplace pay committees to add some common sense and reality to boardroom pay decisions. They should not be a closed shop for an elite who are only interested in looking after their own.”
Unite general secretary Len McCluskey said: “Action needs to be taken to reduce the outrageous gap between CEO pay and that of the average worker. Institutional shareholders increasingly need to use their clout to draw a line in the sand over CEO pay.”