FTSE chiefs’ pay gap with staff narrowed in pandemic

THE pay gap between FTSE bosses and the rest of the workforce narrowed during the pandemic after Covid put a lid on executive awards.

The strain on workers forced companies to rein in – or cancel – their toplevel bonuses last year due to the “vast pay inequalities” caused by the crisis.

However, the High Pay Centre, which campaigns for lower City bonuses, said it was worried the gap was already expanding again this year.

Analysis by the group found the average pay ratio between bosses and workers across the FTSE 350 dropped to 44:1 between 2020/21, compared to 53:1 the year before. However, the 69 companies that have reported their pay ratios in the first quarter of 2022 revealed a rise to 63:1 – almost double the 34:1 ratio those firms reported a year earlier.

Luke Hildyard, the director of the

High Pay Centre, said employers must balance pay awards so middle and lowearners are paid more equitably given the “dire outlook for the UK economy”.

“Our report indicates that companies and their stakeholders showed some sensitivity to the need to treat workers fairly and reduce vast pay inequalities during the pandemic,” he added.

“However, as the Covid emergency hopefully reduces, it would be a shame if the spirit of solidarity it generated fades away as well.”

The High Pay Centre has called for investors to have binding votes on directors’ remuneration reports and to create governance bodies that will monitor pay in the future.

Mubin Haq, the chief executive of the Abrdn Financial Fairness Trust, said: “Going back to past practice, where pay ratios increase year-on-year, is one area where we do not want to see a return to normal following the pandemic.”