Thursday, Oct 6, 2022
International Finance
Economy Featured

Average pay of FTSE 100 CEO in UK witnesses massive jump

IFM_United Kingdom CEO
A CEO in the United Kingdom currently earns 109 times more than the ordinary British worker did in 2020

According to data by the Trades Union Congress and think tank High Compensation Centre, the 100 largest companies in the UK’s economy have experienced a 39% increase in the average pay for their chief executives, who now make £3.4 million on average (TUC).

CEOs of companies in the FTSE 100 index received median average salaries of £3.4 million in 2021 as opposed to £2.5 million in 2020 when the coronavirus epidemic was at its worst and millions of workers were furloughed. Furthermore, CEO pay has surpassed the £3.25 million median figure from 2019, before the epidemic.

Due to the increase in executive compensation, the average UK CEO currently earns 109 times more than the ordinary British worker did in 2020.

The widening pay gap between executives and employees, according to TUC general secretary Frances O’Grady, is causing the cost of living issue.

“Workers ought to receive a just portion of the income they generate. However, she noted that while working people are currently seeing the largest real wage declines in 20 years, CEO pay is skyrocketing,” Frances O’Grady said.

This year, as a result of these imbalanced compensation practices, the gap between employees and managers has grown, aggravating the rising cost of living crisis.

Frances O’Grady demanded that the government enact strict regulations to “rein in executive compensation.”

As part of this, she suggested, there should be worker representatives on the committees that decide on executive compensation and elected worker seats on corporate boards.

“This strategy is already widely used and quite effective in many nations. The government ought to offer this chance to United Kingdom citizens as well,” Frances O’Grady added.

The research also reveals that the yearly bonuses for FTSE 100 CEOs increased to £1.4 million from £828,000 in 2020. Bosses got bonuses on a nine out of ten basis.

The FTSE 100 companies paid almost £720 million on 224 senior executives’ salaries in total. The estimates are based on the most current available salary declarations from annual reports for businesses with fiscal years ending in 2021.

Very high executive compensation is a significant contributor to the cost of living issue, according to Luke Hildyard, director of the High Pay Centre.

It becomes more challenging to fund pay increases for low- and middle-income workers if huge firms are already paying extremely rich executives millions more each year.

The people most affected by the current economic crisis would see a large increase in their living standards if earnings in the United Kingdom were distributed more fairly, whereas those at the top would likely not notice a big change in their way of life.

The study found that Sebastien De Montessus of Endeavour, which runs goldmines in Côte d’Ivoire, Burkina Faso, and Senegal, was the highest paid FTSE 100 CEO. £16.9m was paid to him.

With a salary of £13.9 million, AstraZeneca’s Pascal Soriot was the second-highest paid executive.

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