Returning to work in the first week of January presents many of us with dread. But not so, perhaps, for “fat cat” bosses.
By lunchtime on Friday, the UK’s top brass will have pocketed more than the average worker will get for the entire of 2019.
New research from the High Pay Centre and Chartered Institute of Personnel and Development (CIPD) suggests the average chief executive of leading FTSE 100 firms has a pay packet of £3.9 million, an 11 per cent increase on a year ago.
The pay rise means that top chief executives only need to work for 29 hours in 2019 to be paid the average worker’s annual salary, two hours fewer than in 2018, the report said.
The milestone will be reached at 1pm on 4 January – dubbed “Fat Cat Friday” – as researchers assumed the chief execs work a 12-hour day.
And the figures mean that the average top boss will have been paid 133 times more than the average worker, who pocketed £29,588 in 2018, according to the Office for National Statistics.
The two organisations also said the average FTSE 100 chief executive is paid just over £1,000 an hour, compared with the national living wage of £7.83 for adults.
It comes after widespread outrage over executive pay packets, including the now former Persimmon Homes boss, Jeff Fairburn, who left his job following an outcry at his £75 million bonus.
Peter Cheese, chief executive of the CIPD, said the gap between top earners and the rest of the workforce was still too great.
“Average pay has stagnated whilst top CEO reward has grown, despite overall slow economic growth and very variable business performance.
“Excessive pay packages awarded by remuneration committees represent a significant failure in corporate governance and perpetuate the idea of a ‘superstar’ business leader when business is a collective endeavour and reward should be shared more fairly.
“Stakeholders of all kinds, including many shareholders, are looking for significant shifts in corporate cultures and behaviours.”
Luke Hildyard, director of the High Pay Centre, said: “Excessive executive pay represents a massive corporate governance failure and is a barrier to a fairer economy.
“Corporate boards are too willing to spend millions on top executives without any real justification, while the wider workforce is treated as a cost to be minimised.”
TUC General Secretary Frances O’Grady said: “There are millions of hardworking people in Britain who give more than they get back, but greedy executives are taking more than they’ve earned.
“We need to redesign the economy to make it fair again and that means big reforms to bring fat cat pay back down to earth.
“Executive pay committees have to change. They should be required to include workforce representatives who can speak up for a fair balance of pay with ordinary workers.”
Rebecca Long-Bailey, shadow business secretary, said the report showed how “disgracefully skewed” the UK’s corporate culture had become in some circles.
She said: “The Tories have done nothing to address such blatant inequality and they continue to push real aspiration further and further from the grasp of the majority of people in Britain.”
A new report by the Class think-tank suggested on Friday that executive pay above £300,000 should be removed from a special tax measure which allows firms to dodge corporation rates on top salaries.
Meanwhile, new rules launched by the government on Monday will force firms to publish the ratios between what they pay their chief executives and the average UK worker.