The wage gap between bosses of the UK’s top companies and the average worker has widened, despite forthcoming pay transparency laws.
A report by the Chartered Institute of Personnel and Development (CIPD) has revealed that the ratio of median FTSE 100 chief executive (CEO) pay to median UK full-time or part-time worker pay increased in 2017 to 167:1, up from 153:1 in 2016. But the median pay ratio between blue chip bosses and their staff fell to 77:1 from 84:1.
The median gap persisted despite the impending introduction of pay ratio reporting, which will require listed companies with more than 250 employees to publish and justify the median wage differences between their CEOs and staff. The new rules are set to come into force in January 2019, with reporting requirements expected to commence in 2020, according to People Management.
Charles Cotton, the CIPD’s senior adviser for performance and reward, recommended that organisations should, if possible, calculate their ratios over previous years to help them put their reporting into context when disclosure became mandatory.
The ‘Executive Pay: Review of FTSE 100 executive pay’ report also found that the median salaries of FTSE 100 CEOs had risen to £3.93 million (US$5 million) in 2017, up 11% from £3.53 million (US$4.49 million) in 2016. By comparison, recent Office for National Statistics figures revealed that total pay for all workers had increased by just 2.4% year-on-year.
Chief executives’ mean average renumeration shot up even further, rising 23% from £4.58 million (US$5.82 million) in 2016 to £5.66 million (US$7.2 million) in 2017. But this figure was skewed by two large pay-outs in 2017 – £47.1 million (US$59.88 million) for house-builder Persimmon’s Jeff Fairburn and £42.8 million (US$54.42 million) for finance company Melrose Industries’ Simon Peckham.
The UK Department for Business, Energy and Industrial Strategy’s committee, which is running an inquiry into corporate governance and fair pay, is currently considering what steps can be taken to combat excessive executive salaries.
Meanwhile, a report from professional services firm Deloitte has suggested that investors are losing patience with sky-high awards. Some 14% of FTSE 100 companies received less than 80% approval on their remuneration reports during 2018’s annual general meeting season, up from 7% in 2017.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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The wage gap between bosses of the UK’s top companies and the average worker has widened, despite forthcoming pay transparency laws.
A report by the Chartered Institute of Personnel and Development (CIPD) has revealed that the ratio of median FTSE 100 chief executive (CEO) pay to median UK full-time or part-time worker pay increased in 2017 to 167:1, up from 153:1 in 2016. But the median pay ratio between blue chip bosses and their staff fell to 77:1 from 84:1.
The median gap persisted despite the impending introduction of pay ratio reporting, which will require listed companies with more than 250 employees to publish and justify the median wage differences between their CEOs and staff. The new rules are set to come into force in January 2019, with reporting requirements expected to commence in 2020, according to People Management.
Charles Cotton, the CIPD’s senior adviser for performance and reward, recommended that organisations should, if possible, calculate their ratios over previous years to help them put their reporting into context when disclosure became mandatory.
The ‘Executive Pay: Review of FTSE 100 executive pay’ report also found that the median salaries of FTSE 100 CEOs had risen to £3.93 million (US$5 million) in 2017, up 11% from £3.53 million (US$4.49 million) in 2016. By comparison, recent Office for National Statistics figures revealed that total pay for all workers had increased by just 2.4% year-on-year.
Chief executives’ mean average renumeration shot up even further, rising 23% from £4.58 million (US$5.82 million) in 2016 to £5.66 million (US$7.2 million) in 2017. But this figure was skewed by two large pay-outs in 2017 – £47.1 million (US$59.88 million) for house-builder Persimmon’s Jeff Fairburn and £42.8 million (US$54.42 million) for finance company Melrose Industries’ Simon Peckham.
The UK Department for Business, Energy and Industrial Strategy’s committee, which is running an inquiry into corporate governance and fair pay, is currently considering what steps can be taken to combat excessive executive salaries.
Meanwhile, a report from professional services firm Deloitte has suggested that investors are losing patience with sky-high awards. Some 14% of FTSE 100 companies received less than 80% approval on their remuneration reports during 2018’s annual general meeting season, up from 7% in 2017.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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UK MPs call for small firms to publish gender pay gap data
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