LONDON — By lunchtime on Thursday the median FTSE 100 boss will have earned the average UK salary of £28,200 (AUD$45,324), according to a report by the High Pay Centre.
Median CEO pay in 2015 was £4 million, which works out at £1,009 an hour, taking into account the extra time a company chief will have to put in.
At that rate, it will take about two and a half days of work to earn the entire annual salary of the average staff member.
The High Pay Centre calculations don’t seem to take into account the Bank Holiday on January 2, calling the day Fat Cat Wednesday when the first two and a half days of work fall on a Thursday this year.
The median pay packet for FTSE 100 CEOs is around 144 times that of the national average, according to the High Pay Centre, which is a think tank set up to monitor income disparity.
Stefan Stern, director of the High Pay Centre said in a statement: “We hope the government will recognise that further reform to pay practices are needed if this gap is to be closed. That will be the main point in our submission to the business department in its current consultation over corporate governance reform.”
Pay for corporate chief executives has increased by 82% in the past 13 years, but the average company generated less than 1% return for investors, according to a report by the CFA Institute last month.
The median CEO at a FTSE-350 firm earned £1.5 million, with pay increasing on “an otherwise linear trend halted only by the financial crisis in 2008-2009 when pay levels slipped back to 2006 levels,” the organisation said.
The report calculated the average “economic profits” of companies, which takes into account the returns for investors minus the average cost of raising funds.
“Despite relentless pressure from regulators and governance reformers over the last two decades to ensure closer alignment between executive pay and performance, the association between CEO pay and fundamental value creation in the UK remains weak,” the CFA Institute said.
Prime Minister Theresa May has proposed to introduce binding shareholder votes on CEO pay every year for each company.
The policy was called “a disproportionate response” to the problem of high executive remuneration, a report from research group Big Innovation Centre said earlier this month.