The High Pay Centre (HPC) an independent non-party think tank established to monitor pay at the top of the income distribution in the UK has called for action to curb the vast differences between payment made to bosses and the average worker. According to HPC data shows that the bosses of Britain’s 100 biggest listed companies are earning on average 143 times more than their staff.
When measured against the average UK annual earnings, which stood at £27,000 (€34,000) in 2013 according to government data, the comparison is starker – the top 100 executives earn 174 times more than the average worker.
HPC director Deborah Hargreaves says, “When bosses make hundreds of times as much money as the rest of the workforce, it creates a deep sense of unfairness. Britain’s executives haven’t got so much better over the past decades. The only reason why their pay has increased so rapidly compared to their employees is that they are able to get away with it.”
In 1998, FTSE 100 bosses were typically paid 47 times more than their workers. Analysis of six major UK companies in 1980 found senior executives were paid on average somewhere between 13 and 44 times more than their staff.
Measures to curb executive pay were introduced by business secretary Vince Cable in 2013. Companies must now publish in their annual report a clear single figure for how much their senior executives earn each year, and shareholders have been given binding votes on pay.
But campaigners are calling for worker representation on company boards and remuneration committees, a legally binding target for a reduction in inequality, and the introduction of a maximum pay ratio. At the retailer John Lewis, the ratio is capped at 75:1. At TSB bank, it is 65:1.
A spokesman for the Department for Business, Innovation and Skills said: “The government has introduced comprehensive reforms to give shareholders more powers in order to restore the link between top pay and performance, which in recent years has become excessive and increasingly disconnected. Business secretary Vince Cable also wrote to all the members of the remuneration committees back in April urging restraint.”