£5m a year! Fat cat pay is 183 times the average
THE chief executives of Britain’s top 100 firms earn almost £5million each, startling figures show.
The typical pay packages of the country’s highest-paid bosses are now 183 times greater than the average worker’s annual salary of £27,000.
The huge discrepancy will reignite claims that ‘fat cat’ executive wages are excessively high, and grossly out of proportion to those of their employees.
It comes as many workers are still facing modest pay rises as the economy recovers from the 2008 financial crisis.
Only one in four FTSE 100 companies pay all staff the living wage, which is £7.85 an hour, or £9.15 inside in London.
Analysis of companies’ annual reports found the typical salaries of executives leading the biggest firms on the London Stock Exchange was £4.96million in 2014, up from £4.92million in 2013.
A report by the High Pay Centre thinktank, said this was 183 times greater than the average worker’s salary and 160 times higher than in 2010. The top ten highestpaid bosses alone were paid more than £156million between them.
Shareholders can oppose executive pay policy at company annual meetings but, on average, just 6.4 per cent of people vote against pay awards across the FTSE 100.
Deborah Hargreaves, of the High Pay Centre, said: ‘Pay packages 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 . . . are riddled with glaring weaknesses and conflicts of interest.’
She called for a reformed pay structure where everybody is rewarded fairly for their work.
Rules introduced in 2013 forced firms to publish a single annual pay figure for its chief executives plus historic comparisons in their annual reports. But more transparency has not halted the rise in pay. In the last four years, the typical salary of a chief executive has risen by more than £800,000 from £4.13million.
Miss Hargreaves said: ‘ One of the defining characteristics of the UK economy over recent decades has been for top executives and other high earners to pull further away while low and middle income workers endure periods of real struggle.’
The highest-paid FTSE 100 boss in 2014 was advertising
High fliers: Sir Martin Sorrell and wife Cristiana executive Sir Martin Sorrell, who took home a £43million package. This included £274,000 to fly his wife, Lady Falcone- Sorrell, around the world with him.
The perk was branded ‘ridiculous’ by the High Pay Centre.
Lady Falcone-Sorrell, who is 30 years younger than her 70-yearold husband, travels with him on trips in between her own role with t he World Economic Forum.
Sir Martin, the chief executive of the world’s largest advertising agency WPP, is also paid £50,000 a year to stay in his own homes, while on business, in the belief that this saves the company money on hotel bills.
Almost a quarter of investors refused to back the £43million annual pay packet at a shareholders’ meeting, but were overruled by the majority.
Ben van Beurden, of oil firm Royal Dutch Shell, earned almost £20million last year, while Erik Engstrom of information and analytics firm RELX earned more than £16million.
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