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Employment

CEOs are now paid 109 times more than the average worker

Chief executives are earning 39 per cent more than last year as workers grapple with cost of living crisis, according to TUC and the High Pay Centre research.

The gap between workers and bosses is widening during the cost of living crisis as CEOs’ pay increased by 39 per cent on average in the last year, new research has found.

Median pay of chief executives of FTSE 100 companies rose to £3.41million in 2021, up from £2.46m, the High Pay Centre and the Trades Union congress (TUC) found. It means bosses are now paid 109 times more than the median UK full-time worker, up from 79 times more in 2020 and 107 times more in 2019.

The figures come as dock workers at the UK’s largest container port in Felixstowe, Suffolk, have become the latest workers to go on strike over pay. Railway staff, refuse collectors and criminal barristers are among the workers who have walked out over pay in 2022 as wages have struggled to keep up with surging inflation of over 10 per cent.

“Workers deserve a fair share of the wealth they create but right now, CEO pay is soaring while working people experience the biggest real wage fall in 20 years,” said TUC general secretary Frances O’Grady.

“We need stronger rules to rein in executive pay. This should include worker representatives on the committees that set top pay and elected seats for workers on company boards.

“This approach is already commonplace in many countries and works very well. The government should give UK workers this opportunity too.”

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Overall, FTSE 100 firms spent £720m paying 224 executives in 2021.

There was a rise in bonuses too with 90 per cent of CEOs on the FTSE 100 receiving one. Firms forked out £1.4m in 2021 compared to £828,000 in 2020 and £1.1m in 2019 before the pandemic.

The top-earning CEO was Sebastien De Montessus of mining firm Endeavour, who raked in £16.85m in 2021 – 539 times the pay of the median UK worker.

De Montessus moved ahead of AstraZeneca chief executive Pascal Soriot on £13.86m while Albert Manifold, head of construction giant CRH, was next, earning £11.68m.

Nine of the 10 top-earning CEOs were men with only pharmaceutical GlaxoSmithKline CEO Emma Walmsley making the list on £8.2m. There were just nine female FTSE 100 CEOs in 2021, up from seven in the previous year.

Of the seven women who were in post for the whole of 2021, median pay was just over £3m compared to around £3.5m for men.

Luke Hildyard, director of the High Pay Centre, said rising CEO pay made it harder for firms to raise workers’ wages at a time when the cost of living is rising.

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“Very high executive pay is a big part of the cost of living problem. If large employers are paying millions more to already very wealthy executives, that makes it harder to fund pay increases for low and middle income workers,” said Hildyard.

“If incomes in the UK were shared more evenly, that would significantly raise the living standards of the people hit hardest by the current economic crisis, while those at the top probably wouldn’t notice much difference to their lifestyles.”

Gary Smith, general secretary of the GMB trade union, described the figures as “sickening”.  

“There’s nothing wrong with being paid for a job well done, but the lack of ‘restraint’ from those at the top is a slap in the face to workers who are being denied a proper pay rise,” said Smith.

“That’s why across the country GMB members are taking action to defend their living standards and make work better.”

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