New research from the think tank High Pay Centre has suggested that the average FSTE 100 CEO’s earnings for this year will surpass that of the median annual wage of the average worker within the UK by 5.30pm today (January 6, 2021).
This means that, for the rest of the year, employees will be working to achieve the same financial compensation that these leaders make in just three working days.
The calculations that discovered this shocking disparity in pay between FTSE 100 CEOs and their workers are based on previous analysis of pay disclosures made by CEOs, combined with statistics released by the UK Government showing pay levels across the economy.
"Pay for top CEOs today is about 120 times that of the typical UK worker. Estimates suggest it was around 50 times at the turn of the millennium or 20 times in the early 1980s,” noted Luke Hildyard, Director at the High Pay Centre.
However surprisingly, the news is a slight improvement on 2020 due to pay levels among senior leadership essentially staying relatively flat throughout the year due to the coronavirus pandemic, whilst employee pay increased slightly.
As a result, CEOs now have to work 34 hours of the year to surpass median earnings, rather than the 33 hours needed in 2020.
“Factors such as the increasing role played by the finance industry in the economy, the outsourcing of low-paid work and the decline of trade union membership have widened the gaps between those at the top and everybody else over recent decades,” said Hildyard.
“These figures will raise concern about the governance of big businesses and whether major employers are distributing pay in a way that rewards the contribution of different workers fairly. They should also prompt debate about the effects that high levels of inequality can have on social cohesion, crime, and public health and wellbeing.”
According to the High Pay Centre, it’s still too early to truly ascertain what impact the COVID-19 pandemic has had on pay disparity amongst employers and employees. The majority of data in this area currently covers up to 2019, meaning the true impact is yet to be analysed.