Fat cats rake in workers’ salary in THREE days

By 5pm today, bosses of the UK’s biggest companies will have earned more in 2020 than the average worker will take home in 12 months.

Chief executives in the FTSE 100 are paid, on average, about £3.5m – or 117 times the £29,559 salary of ordinary employees.

At about £900 per hour it will take them just 32 hours and 48 minutes behind their desk to reach that level – or 4.48pm today, the third working day of the year – according to the Chartered Institute Of Personnel And Development (CIPD), the professional body for human resources experts.

For employees feeling downcast about paying off Christmas debts and the start of another year in the office, it will be little consolation that this so-called ‘High Pay Day’ falls a few hours later than usual. This is thanks to a reduction in bonuses awarded last year that reduced the bosses’ pay ratio from 133 times the typical workers’ salary.

High pay will be a key issue in 2020 as this is the first year that publicly listed firms with more than 250 UK employees will be forced to disclose the ratio between the pay of the chief executive and an average worker. The bosses will have to accompany this with an explanation of why they deserve their pay.

A small number of firms took the decision to disclose this ratio a year early.

Paul Polman, the boss of consumer giant Unilever, earned 250 times more than the median employee. Dave Lewis, the chief executive of Tesco who will step down next year, earned 226 times as much as an average employee.

Jeff Fairburn, the former chief executive of housebuilder Persimmon, was the FTSE 100’s best-paid boss in the last reporting period, taking home £45.7m – more than 1,000 times the average workers’ wage.

Critics have argued that excessive executive pay packets undermine trust in business and fuel concerns that workers are getting a raw deal.

Peter Cheese, chief executive of the CIPD, said: ‘Pay ratio reporting will rightly increase scrutiny on pay and reward practices. We need businesses to step up and justify the very high levels of pay for top executives.’

The High Pay Centre, a thinktank that monitors pay packets, has argued that the role chief executives play in a business’s success is over-stated.

Director Luke Hildyard said last night: ‘Hopefully new reporting requirements will lead to a more sensible balance between those at the top and everyone else.’