Top bosses will have earned more by midday on Wednesday than typical workers earn in the entire year, the High Pay Centre think tank has said.
Branding it “Fat Cat Wednesday”, it says that is the time executives will pass the average UK salary of £28,200. High Pay Centre director Stefan Stern said it was an important reminder of the unfair pay gap in the UK. The government is considering plans to make firms reveal the pay gap between chief executives and average workers.
The High Pay Centre’s calculation assumes that the executives work 12 hours a day, most weekends and take fewer than 10 days holiday a year. “We hope the government will recognise that further reform to pay practices are needed if this gap is to be closed, said Mr Stern.” “Effective representation for ordinary workers on the company remuneration committees that set executive pay, and publication of the pay ratio between the highest and average earner within a company, would bring a greater sense of proportion to the setting of top pay,” he added.
The think-tank has made the calculation for the the past three years, but this year it is comparing the top bosses’ median salary of about £4m a year with the median UK employees’ salary of £28,200. Previously it has used the average FTSE 100 pay packet – but this is slightly skewed by two or three particularly large salaries. Prime Minister Theresa May has said tackling corporate excess is a priority for her government. It is currently looking at whether to force companies to introduce pay ratios, which would show the gap in earnings between the chief executive and an average employee.
The business lobby group, the CBI, said it was right for approaches to corporate governance to evolve but that shareholders should be holding companies to account. “Businesses shouldn’t award exceptional pay for poor performance and shareholders have a key role in ensuring sensible, sustainable and reasonable pay setting policies,” said Josh Hardie, the CBI’s deputy director general. The HR body the CIPD said there was still “a shocking disconnect between the pay for for those at the top and the rest of the workforce” and that the “disconnect de-motivates staff at work”.