By 1.00pm on 4 January 2024, FTSE 100 CEOs’ earnings for 2024 had gone past the median UK worker’s full-time salary for the whole year.
According to calculations by the High Pay Centre think tank, based on analysis of the most recent CEO pay disclosures published in companies’ annual reports, median FTSE 100 CEO pay (excluding pension) currently stands at £3.81 million (£1170 per hour).
This is 109 times the median full-time worker’s pay of £34,963 and the High Pay Centre points out, comes against a backdrop of calls from leading figures in the city and big business for UK CEOs to be paid more.
Other calculations published by the centre include that a partner at a ‘magic circle’ law firm, average pay £1.92 million, would need to work until 8 January to match the median worker’s annual salary, while a partner at a ‘Big Four’ accountancy firm would have to wait until 16 January.
Everyone in the top 1% of full time UK earners, making at least £145,000, will have overtaken the annual pay of the median full-time worker by 29 March.
High Pay Centre director Luke Hildyard said the figures called into questions claims that top earners in Britain were not paid enough while the TUC said that they revealed “obscene levels of pay inequality”.
Highlighting that the London Stock Exchange Chief Executive had argued last year that low CEO pay levels create a risk to the UK economy, Mr Hildyard concluded: “When politicians listen to these misguided views, it’s unsurprising that we end up with massive inequality, and stagnating living standards for the majority of the population.”
The TUC points out that, while FTSE CEO pay increased by £500,000 (16%) in 2023, the Office for Budget Responsibility (OBR) has forecast that “real wages” will not recover to their 2008 value until 2028.
Our HR Comments: – FTSE 100 CEOs earned median UK worker’s annual pay in three days |Consensus HR – Herts, Beds
Matthew Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “An interesting article written by our Chartered Instituted of Personnel & Development in relation to pay for median workers in relation to FTSE 100 CEO’s. Pay is one of the main areas together with development of the team that we find at Consensus HR, can cause friction between the team and majorly affect team moral and the business overall. We advise all our clients to ensure pay is reviewed annually with a constructive meeting taking place with the employee and their pay discussed. We stress to management and the team that a pay review meeting does not automatically mean a pay rise but the opportunity to look at the team members current pay, job, job description and performance with results received from their yearly performance review (Appraisal). This meeting allows all team members to have the opportunity to have a 121 with their manager and discuss fully. We suggest that pay reviews should happen annually and preferably after a performance review / appraisal has taken place and SMART objectives set and at a separate meeting to that of the performance review (Appraisal).
YOUR OUTSOURCED HUMAN RESOURCES DEPARTMENT.
For further information on any of the HR subjects we provide, please click the heading below: