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In the first three working days of 2018, the UK's top bosses made more money than the typical UK full-time worker will earn in the entire year.
"Fat Cat Thursday" - 4 January 2018 - marked the point at which pay for top executives passed the median UK gross annual salary of £28,758 for full-time employees.
This finding is based on calculations by independent think tank the High Pay Centre and the Chartered Institute of Personnel and Development (CIPD). The High Pay Centre and the CIPD are working together to "ensure that high pay is addressed as part of a much broader review of corporate governance in the UK, including greater transparency on workforce data".
In fact, the CIPD reports that the mean FTSE 100 ceo pay packet fell by a fifth in the past year, down from £5.4m million to £4.5 million (2016 figures, as published in 2017). Despite the fall, the ratio of ceo pay to the pay of the average full-time worker stands at 120:1.
Previous CIPD research has shown that excessive executive pay can have a damaging effect on the workforce. A survey of 1,000 working adults in 2015 found that:
- 71% agreed that ceo pay levels in the UK are generally too high;
- 60% agree that ceo pay levels in the UK demotivate employees;
- 54% agree that ceo pay levels in the UK are bad for an organisation's reputation.
Peter Cheese, chief executive of the CIPD, said: "To ensure this year's fall in ceo remuneration isn't just a blip on the consistently upward trend of recent years, it's crucial that the Government keeps high pay and corporate governance reform high on its agenda.
"We also need business, shareholders and remuneration committees to do their part and challenge excessive pay, to understand pay and reward for top executives in the context of the whole organisation, and look at how pay is linked to driving sustainable performance."
As part of Government reforms, new laws will require around 900 listed companies to annually publish and justify the pay ratio between chief executives and their average worker.
Stefan Stern, director of the High Pay Centre, said: "Publishing pay ratios will force boards to acknowledge these gaps. We look forward to working with business and Government to make this new disclosure requirement work as effectively as possible."
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