The bosses of Britain’s biggest companies are now getting paid 183 times the size of the average worker in the UK.
The High Pay Centre revealed in a new report that chief executives at FTSE 100 companies earn on average £4.964 million ($US7.78 million) in 2014. This is a slight increase from last year’s £4.923 million ($US7.72 million), and from the £4.129 million ($US6.48 million) average in 2010.
In other words, this is around 183 times the earnings of the average full-time UK worker. This is up from 160 times in 2010. The High Pay Centre said that the report “will create pressure for further action to reduce gap between the super rich and low and middle-income earners.” However it also pointed out that shareholders, who have the ability to vote against CEO pay packets, only totalled an average of 6.4% at Annual General Meetings.
“Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives,” said High Pay Centre Director Deborah Hargreaves in a statement.”It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest.”
“The Coalition Government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket. However it’s clear that these reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.”
According to the Office For National Statistics, Britons’ average total pay is now around £488 ($US764) a week as of June 2015.
Comparing April to June 2015 with a year earlier, wages for employees in Britain increased by 2.4% including bonuses and by 2.8% excluding bonuses. That’s over a period in which there was zero consumer price inflation — so wages are rising while the prices of ordinary goods people buy aren’t.
Looking at longer term movements since comparable records began in 2000, average total pay for employees in Great Britain in nominal terms (that is, not adjusted for consumer price inflation) increased from £311 a week in January 2000 to £488 a week in June 2015; an increase of 56.6%.
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