According to studies conducted by the High Pay Centre think tank and the Trades Union Congress, CEO compensation in the UK’s 100 largest companies has increased by 39%, to an average of £3.4m (TUC).
CEO compensation at FTSE 100 companies increased to £3.4m in 2021 from £2.5m in 2020, when many executives voluntarily took a pay cut as they forced millions of workers into furlough due to the spread of the coronavirus. The median salary for a CEO in 2019 is now over £3.25 million, up from £3 million before the pandemic.
CEO compensation in the United Kingdom has increased from 79 times that of the average worker in 2020 to 109 times that in 2030 as a result of the recent pay raise.
The TUC general secretary, Frances O’Grady, blamed the rising cost of living on the growing gap between executive and worker compensation.
Workers ought to keep more of the money they earn. But right now, she said, CEO pay is skyrocketing while workers face the biggest real wage falls in 20 years. “ Inequitable pay practices have contributed to a widening gulf in income this year, particularly at the top.
O’Grady urged the government to “rein in executive pay” by enacting strict regulations. She argued that workers should have “elected seats for workers on company boards” and representation on committees responsible for determining executive compensation. This method is widely used in many countries because it is effective. Workers in the UK should be afforded the same chance.
The annual bonuses of FTSE 100 CEOs increased to £1.4m from £828,000 in 2020, according to the data. Pay raises were given to nine out of ten executives.
Spending on compensation for the top 224 executives at FTSE 100 companies totaled over £720 million. The numbers come from the most recent available annual reports detailing executive compensation for the fiscal years ending in 2021.
Executive compensation packages that are extremely generous contribute significantly to the cost of living, according to High Pay Centre director Luke Hildyard. It will be difficult for large companies to raise wages for low and middle-income workers if they are paying millions more to already very wealthy executives. More equitable distribution of income in the UK would greatly improve the standard of living for those who have been hardest hit by the current economic crisis, while the wealthy likely wouldn’t notice much of a change in their own standard of living.
According to the study, Sebastien De Montessus of Endeavour, which runs goldmines in Côte d’Ivoire, Burkina Faso, and Senegal, was the highest paid CEO of the FTSE 100 companies. He received £16.9 million in compensation for his services.
Pascal Soriot of AstraZeneca, the number two highest paid CEO, made £13.9m.
Reforms to regulations affecting corporate pay-setting processes are being advocated for by the TUC and the High Pay Centre.
Firms are mandated to have at least two workers’ representatives elected to serve on compensation committees.
Protection for union representatives’ right to distribute information about union membership and collective bargaining at workplaces.
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