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”.
UK firms need to continue to have “barrier-free” access to European Union markets after Brexit, the CBI business lobby group has warned.
It said UK companies should not be subjected to trade tariffs, with only “minimal” other barriers in place. In a report, it also called for a migration system that allowed firms to obtain the skills and labour they need. The government said it was committed to delivering the best possible access to European markets for UK businesses. The CBI reiterated its call for a “smooth exit” from the EU, avoiding a “cliff edge” break.
‘Thousands of conversations’
It said it had held “thousands of conversations” across the country with trade associations and firms of all sizes since the June referendum vote to leave the EU. “There are serious concerns in the business community about disruption if the day after the UK leaves the EU, its final ‘deal’ is not complete, with all trading and regulatory issues fully ironed out,” it said. Its report urged the government to adopt a “whole economy” approach to ensure individual sectors are not penalised. “There are some companies for whom avoiding high tariffs on their goods trade is critical, and others who prioritise avoiding non-tariff barriers to trade, particularly around services,” it stated. “Additional barriers to any sector’s trade will be detrimental to other sectors. A new arrangement with the EU must therefore be open and comprehensive, covering goods and services, tariffs and non-tariff barriers.”
According to the report, businesses also need a clear plan for future regulation that balances the need for “influence, access and opportunity” in the EU, protection for the social and economic benefits of EU funding, and a renewed focus on global economic relationships. CBI director-general Carolyn Fairbairn said: “Leaving the EU will be a highly complex process and all sectors of the economy are making their priorities clear in order to get it right. “The government will need to take a ‘whole economy’ approach to avoid leaving sectors behind.” A government spokeswoman said it agreed with the CBI’s call for a smooth and orderly exit that works for all parts of the economy. “The prime minister has made clear that we will deliver the best possible access for UK businesses trading with – and operating within – the European market,” she said.