In the first three days in 2019, top CEOs in leading companies in Britain already earn more money than average worker’s annual salary, recent study found.
According to a report compiled by CIPD, an association for human resource professionals, and the High Pay Centre, a research group, the FTSE 100 bosses reached this milestone around 1pm London time (9pm Singapore time). After an 11 percent jump in pay, these top leaders surpassed female employees’ full-year earnings even earlier, by around 8.30am.
The gap between chief executives and their employees is reportedly to remain significantly high, despite government efforts to make bosses pay more transparent and rules giving shareholders a voice on compensation. The FTSE chiefs now earn 133 times more than workers, up from 47 times in 1998, based on their median pay.
The disparity in the UK reflects a broader rise in income inequality across much of the developed world. New rules came into force on Jan 1 that will require all publicly listed UK firms with more than 250 employees to disclose their pay ratios starting next year and justify compensation levels for their top bosses, Straits Times reports.
There has been increasing criticism of soaring compensation. Last year, Jeff Fairburn quit as Persimmon’s CEO after a backlash against his £75 million (S$129.5 million) pay and bonus package.
Commenting on the finding, Luke Hilyard, director of the High Pay Centre said, “To raise living standards, we need growth and innovation, but also to ensure that growth is fairly distributed.”
The gulf in the US is even more glaring, with a CEO-to-worker pay ratio of 312:1 in 2017, according to an August report by the Economic Policy Institute. Average CEO compensation, based on the largest 350 companies, was 18 percent higher than the previous year.