Report: Top UK CEOs Earned the Average Employee’s Annual Salary by Thursday

Report: Top UK CEOs Earned the Average Employee’s Annual Salary by Thursday

An analysis released this week by the CIPD and the High Pay Centre highlights the extent of income inequality in the UK by comparing the compensation of FTSE 100 CEOs to that of Britain’s average full-time employee, the Guardian’s Rupert Neate reports:

The chief executives of FTSE 100 companies are paid a median average of £3.45m a year, which works out at 120 times the £28,758 collected by full-time UK workers on average. On an hourly basis the bosses will have earned more in less than three working days than the average employee will pick up this year, leading campaigners to dub the day “Fat Cat Thursday”. …

The analysis … shows chief executives of FTSE 100 companies are paid an average of £898 per hour – 256 times what apprentices earn on the minimum wage.

The ratio between the pay of the CEO and the average employee (the definition of which is a matter of some controversy) is becoming a widely accepted standard for measuring income inequality within organizations and societies. As the pay gap between top executives and the rank and file has grown in recent decades, spurred on in some cases by tax loopholes, activists have decried this trend as evidence that CEOs are overpaid, while employees are not receiving their fair share of growing corporate profits.

In an effort to address inequality and curb CEO pay packages deemed excessive, the UK government has proposed new laws that will require listed companies to publish and justify their CEO-to-median-employee pay ratios, along with “naming and shaming” companies whose shareholders object to executive compensation plans as determined by the board. A similar disclosure rule was adopted in the US by the Securities and Exchange Commission in 2015, which will require public companies to publish their pay ratios in their proxy statements, starting with the 2017 fiscal year. Portland, Oregon has gone a step further and imposed a surtax on companies doing business in the city whose CEOs earn more than 100 times their median employee.

Read more

Top British Firms Show Little Progress Toward Gender Parity on Executive Committees

Top British Firms Show Little Progress Toward Gender Parity on Executive Committees

Cracking the Code, a partnership of organizations dedicated to putting more women in corporate leadership in the UK, released new research last week showing that the number of women on the executive committees of FTSE 100 companies has not changed in more than two years, Clare Allerton reports at Personnel Today:

The findings from the collaboration between KPMG, Why Women Work, YSC and the 30% Club highlighted a career bottleneck for females at executive committee level, where the number of women has remained at 17% for more than two years. This is despite progress at every other level of the executive pipeline in the wider FTSE 250, with the number of women holding roles in the ranks immediately below the executive committee increasing to 25% in 2016.

Read more