Chief Executives' Average Pay '183 Times That Of Workers'

Chief Executives' Average Pay '183 Times That Of Workers'

The average pay of a chief executive in leading companies is almost £5 million - 183 times that of workers, a new study has revealed.

The top 10 highest-paid chief executives (CEOs) were paid over £156 million between them in 2014, prompting fresh calls for action to curb executive pay.

Research among FTSE 100 companies by the High Pay Centre think tank found that average pay jumped to £4.964 million in 2014, compared with £4.129 million in 2010.

The figure was 183 times the earnings of average full-time workers, up from 160 times in 2010.

High Pay Centre director Deborah Hargreaves said: "Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives.

"It's more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest

"The coalition Government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket.

"However it's clear that these reforms didn't do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do."

The average pay ratio between FTSE 100 chief executives and the average wage of their employees was 148 last year, up from 146 in 2013.

Only a quarter of the FTSE 100 firms are accredited to the Living Wage Foundation for paying the living wage, the report added.

The report said changes to regulations so that UK-listed companies have to publish pay details of their lead executive appear to have had virtually no effect in curbing "excessive" executive pay.

"It seems highly unlikely that the gap between CEOs and other workers will close in the foreseeable future," said the report.

The reforms in 2013 increased the powers of shareholders to hold companies to account over executive pay, but they have shown "little interest" in doing so, said the High Pay Centre.

TUC general secretary Frances O'Grady said: "With top bosses now earning 183 times more than the average full-time worker, inequality is reaching stratospheric levels.

"After years of falling living standards it is a disgrace that top execs are taking an even bigger share of the rewards of growth. We need a recovery that works for the many and not just the few.

"Ordinary employees need to be included in workplace pay committees to add some common sense and reality to boardroom pay decisions. They should not be a closed shop for an elite who are only interested in looking after their own."

Unite general secretary Len McCluskey commented: "The parallel pay universe that Britain's top bosses live in has again been exposed by these new findings.

"Action needs to be taken to reduce the outrageous gap between CEOs pay and that of the average worker. Institutional shareholders increasingly need to use their clout to draw a line in the sand over CEO pay.

"CEOs ought to be putting cash into creating jobs, especially for apprentices and rewarding employees with decent pay rises, instead of greedily hosing themselves down with torrents of cash."

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