Fat cat bosses who’ll have raked in more by this Thursday than workers earn all year
BOSSES at Britain’s biggest companies will earn more by Thursday this week than the average worker takes home in an entire year.
The widening gulf means the typical chief executive at a FTSE 100 company is paid more than 100 times the average worker’s salary – with many pocketing far more.
In one case, the boss of a littleknown firm has been handed more than 600 times his own staff’s average pay. The news will come as a shock to many facing higher food bills and household energy costs, which are rising far faster than typical pay rises.
It also deals a blow to attempts by former PM Theresa May to
‘This grossly exceeds what the public sees as fair’
tame ‘fat cat’ pay by forcing companies to disclose more information about their pay ratios.
In 2017, she described the behaviour of some company bosses as ‘the unacceptable face of capitalism’ in an article for The Mail on Sunday. She launched a public register – commonly now referred to as a ‘blacklist’ of egregious executive excess – when a significant number of shareholders complain boardroom pay is too high.
Details of the widening pay gap are contained in a report to be published this week by the High Pay Centre, a think-tank that campaigns for a fairer deal for staff – and more moderation from bosses. It found that after a brief pause during the pandemic, the gap between chief executive and average worker pay is on the rise again.
Last year it took until 9am on the fourth working day of the year for a FTSE 100 boss to earn more on an hourly basis than a UK worker’s annual salary, based on median remuneration figures for both groups. This year the dubious milestone will be passed much earlier – at about lunchtime on the third working day of the year, January 5.
Executives running Britain’s top 100 companies were paid an average of £3.41million in 2021 – the latest full-year figures available – 39 per cent more than the previous year and the highest since 2018.
That is 103 times the average worker’s salary of £33,000, according to the Office for National Statistics, but this headline figure masks some even bigger differentials.
The largest pay gap was at Safestore, the self-storage business led by Frederic Vecchioli. He was paid £17.1million in 2021 – 656 times more than his own workers earned on average. Vecchioli, 55, will have made more in a few hours than his employees will in the whole year. ‘This grossly exceeds what the public thinks is fair,’ said Deborah Hargreaves, founder of the High Pay Centre. ‘According to a recent survey… more than 60 per cent of people think chief executives should be paid only ten times the average salary. Why should the boss of retailer Next, for example, be worth 245 times the income of a shop worker or warehouse assistant?’
Sir Stephen Timms, chairman of the Work and Pensions Select Committee, said: ‘Widening pay inequality isn’t just unfair, it’s damaging the economy. A tiny number accumulates more and more, while their employees turn to food banks to survive.’ As PM, Mrs May saw the pay gap, which has widened since the 1990s, as a factor that contributed to voter anger with the status quo. Her disclosure rules came into force for financial years from 2019. But the High Pay Centre said pay ratios had widened ‘significantly’ in the aftermath of the pandemic.
Ms Hargreaves said bosses’ pay packages, which include salary, bonuses, share options and pensions, were too skewed to ‘bottom line’ financial performance rather than tied to employment conditions or staff welfare. ‘The bosses are trapped in a gilded cage. No one wants to break out – and why would you, when a few years of work would leave you and your family wealthy without the need to work ever again?’ she said.
Third on the pay-gap list was cyber-security firm Darktrace, led by Poppy Gustafsson, whose £12million package was 271 times the average. The companies named declined to comment.