Happy Fat Cat Friday!
It’s only January 4, but the typical FTSE 100 boss has already earned as much as average Briton will all year
BACK in the office and feeling decidedly downcast after the Christmas festivities?
Then the following information is unlikely to lift your mood.
By lunchtime today, the bosses of Britain’s biggest companies will have banked what it takes ordinary workers all of 2019 to earn. So welcome to Fat Cat Friday.
Chief executives of FTSe 100 companies have average annual salaries of £3.9million – 133 times the typical worker’s £29,574.
It means these Footsie bosses take around two-and-a-half working days to earn as much as the average employee.
If chief executives returned to their desks at 8am on January 2, they would hit that total at 1pm this afternoon. The highest paid British bosses would get there even sooner – with some taking little more than two hours to earn the national average.
The findings – in a report by the High Pay Centre and Chartered Institute of Personnel and Development – pile more pressure on Theresa May to tackle boardroom excess after she criticised the ‘irrational and unhealthy’ divide between bosses and workers.
Luke Hildyard, director of the High Pay Centre, said: ‘excessive executive pay represents a massive corporate governance failure and is a barrier to a fairer economy. Corporate boards are too willing to spend millions on top executives without any real justification, while the wider workforce is treated as a cost to be minimised.’ The calculations in the report are based on chief executive pay in 2017 – the latest figures available. The analysis found the average Footsie boss earns £1,020 an hour – up 11 per cent on the previous year. It assumes they work 12-hour days for 320 working days.
The highest-paid British bosses would have earned the equivalent of a typical annual salary on their first day back at work.
Jeff Fairburn, the former chief executive of housebuilder Persimmon, raked in more than £47million in 2017 and would have earned £29,574 by 10.24am on January 2 – just 2 hours and 24 minutes after returning to his desk. He was asked to leave in November following a row over a £75million bonus.
The High Pay Centre and CIPD have urged companies to replace long-term pay plans, which are often linked to share prices and stock options, with a simpler system of a basic salary and a smaller share award.
But Mark Littlewood, director general of the Institute of economic Affairs, said Fat Cat Friday was a gimmick. He claimed driving down chief executives’ wages would not help workers and would reduce tax revenue.