It’s Fat Cat Thursday – when top bosses have earned more so far in 2018 than most workers will in the entire year
- Credit: © ARCHANT NORFOLK PHOTOGRAPHIC
Top bosses have made more money so far in 2018 than the typical worker will in the whole year, new figures reveal.
Despite the mean pay of chief executives in FTSE 100 companies falling by a fifth last year, from £5.4m to £4.5m, it is still 120 times more than an average full-time worker.
Today has been dubbed Fat Cat Thursday, as the pay of top chief executives will pass the median annual salary of £28,758 for employees.
All listed companies will have to publish the pay ratio between bosses and workers under new corporate governance reforms this year.
The High Pay Centre think tank and the Chartered Institute of Personnel and Development (CIPD) said there had been 'modest' restraint by company boards but the pay gap between the top and average workers remained wide.
Stefan Stern, director of the High Pay Centre, said: 'While it was encouraging to see a tiny amount of restraint on pay at the top of some FTSE 100 companies last year, there are still grossly excessive and unjustifiable gaps between the top and the rest of the workforce.
'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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Peter Cheese, chief executive of the CIPD, said the drop would have been largely driven by the prime minister's proposed crackdown on boardroom excess.
'It's crucial that the government keeps high pay and corporate governance reform high on its agenda, but we also need business, shareholders and remuneration committees to do their part and challenge excessive pay.'
He added: 'We need a radical rethink on how and why we reward chief executives.'
The study of company annual reports found that Sir Martin Sorrell, chief executive of advertising giant WPP, was the highest paid boss for the second year, although his total pay fell from £70.4m to £48.1m.
He was followed by Arnold Donald of cruise company Carnival (£22m), Rakesh Kapoor of consumer goods company Reckitt Benckiser (down from £23.1m to £14.6m), Pascal Soriot of pharmaceutical firm Astrazenica (£13.3m) and Erik Engstrom of information firm Relx (£10.5m).
Rebecca Long Bailey, shadow business secretary said: 'It's a shocking sign of just how out of control inequality has grown that top CEOs have already been paid in three days what most people earn in an entire year.'
A business department spokesman said the government would be introducing new laws requiring companies to annually report and explain the pay ratio between chief executives and their UK workforce, adding: 'While most companies are proactive and thoughtful in implementing responsible business practices, the government recognises concerns that bosses' pay can sometimes become disconnected from company performance.'