It’s “Fat Cat Tuesday,” the day created by think-tank, the High Pay Centre (HPC) to illustrate just how massive the gap between executives and normal workers in the UK is.
According to their findings, by the close of business on Tuesday evening, British CEOs will have already earned more than the average Brit will in the whole of 2016.
- Based on their calculations, the HPC says that by late afternoon on Tuesday, CEOs will have earned nearly £28,000 ($41,000) since starting work yesterday morning.
- This is more than the £27,645 ($40,500) that the average UK worker earns in a whole year.
- According to the data, the average pay for FTSE100 CEOs — probably the best paid business people in the UK — is £4.96 million ($7.28 million).
- That works out at £1,260 ($1,849) per hour based on what the HPC calls “very generous” estimates about the number of hours they work and how much holiday bosses take.
- The HPC says that since 1998 the amount CEOs are paid has grown from 47 times the salary of an average worker to 183 times that number now.
The methodology used by the High Pay Centre isn’t exactly bulletproof — it compares mean pay for chief executives with median pay for normal workers — but the centre admits this, and, to be fair, the data does highlight the absolutely huge gap between bosses and employees across the UK.
Stefan Stern, the HPC’s director, said:
“‘Fat Cat Tuesday’ again highlights the continuing problem of the unfair pay gap in the UK.
“We are not all in this together, it seems. Over-payment at the top is fuelling distrust of business, at a time when business needs to demonstrate that it is part of the solution to harsh times and squeezed incomes, and is promoting a recovery in which all employees can benefit.”
The findings look pretty startling at first glance, but they don’t take into account the value added to companies by their CEO. In an emailed statement, Sam Bowman, executive director at the free-market think-tank, the Adam Smith Institute called the research “the hand-waving of pub economics, not serious analysis.”
Bowman added that “Chief executives can be worth quite a lot to firms, as is shown by huge moves in company share prices when good CEOs are hired or bad CEOs are fired. Steve Jobs can make a firm; Steve Ballmer can break a firm.”