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Fat cat pay rockets to £5.7m a year while workers suffer

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It would now take 195 years for the average UK worker to earn what one FTSE 100 CEO gets in a year
A laughing business man looks at a laptop screen in a boardroom overlooking St Paul's cathedral in London
Fat cats are happy, but workers continue to suffer Credit: Getty/Daily and Newton

The results are in: the typical pay of a FTSE 100 chief executive rose by 11% last year, compared to just 2% for the average worker.

According to this week’s report by the High Pay Centre and CIPD, CEOs were paid a staggering £560.1 million in the financial year ending 2017.

It’s hard to believe, but that works out as £5.7 million per CEO.

By contrast, workers’ pay has only increased by 2% on average - well below the current rate of inflation.

This means it would now take 195 years for a worker on a mean salary of £29,009 to earn what a CEO gets in mean earnings in one year.

Fat cats strike back

The 11% fat cat pay rise means the ratio between executive and average pay has shot up since last year.

So 68 CEOs now earn more than 100 times the UK mean all-worker salary – up from 60 in 2016.

Working people living through the longest pay squeeze since the Napoleonic Wars will find it hard to understand why fat cat executives are suddenly splashing the cash again.

And after dropping her promise to put workers on boards last year, Theresa May must shoulder some blame for letting CEOs off the hook again.

We can’t go on like this. That’s why the TUC is calling for workers to get seats on boardroom pay committees to bring common sense to pay decisions. If you agree, sign our petition here.

And the government should put the minimum wage up to £10 an hour to give more workers a fairer share of the wealth they create.

Workers are living through a 17-year wage squeeze - the worst in two hundred years

One rule for them

Who are these CEOs, and why are they getting paid so much?

The list includes Ashley Almanza, CEO of G4S – the firm that made such a mess of providing security at the 2012 Olympics the army had to step in to help.

According to the figures, Almanza earns 466 times the average salary of a UK worker in 2017.

Then there’s Steve Rowe, CEO of Marks & Spencer, who pocketed £1.6 million last year – 97 times more than the average worker.

That’s a hefty reward for a company that is in real financial trouble – M&S has recently announced plans to close 100 stores by 2022, putting thousands of jobs at risk.

Despite this, M&S is refusing to recognise shopworkers’ union Usdaw, which is working to minimise the impact of the restructuring on workers and jobs.

So while Mr Rowe sits on a million-pound pay packet, his hard-working staff are in the dark about their futures.

British Prime Minister Theresa May walking out of 10 Downing Street holding a folder
Theresa May has broken her promises on the 'just about managing' Credit: Jack Taylor/Getty

Broken promises

When Theresa May became Prime Minister she promised to help those who were ‘just about managing’ – workers who have a job but struggle to ends meet in the face of rising living costs and the worst wage squeeze in two centuries.

At the centre of this pitch was the idea of putting workers on company boards to help tackle business short-termism and executive greed.

This seemed to focus minds in company boardrooms, because last year’s executive pay report showed a 17% drop in mean pay from the year before.

But one year on, the gap between CEO pay and workers’ pay has rocketed again.

This suggests that the government’s decision to drop plans for workers on boards last August has given fat cats the green light to start splashing the cash again.

So while we welcome the government’s decision to bring in a pay ratio reporting requirement, much more still needs to be done to crack down on executive pay.

We can’t go on like this

Theresa May talked the talk on corporate reform, but this week’s figures show she’s failed to walk the walk.

Fat cat pay is spiralling out of control again while workers continue to suffer – and this has happened on her watch.

That’s why we’ve had enough of the smoke and mirrors around fat cat pay.

Workers need seats on boardroom pay committees to help rein in executive greed.

And the government must urgently raise the minimum wage to £10 an hour to help out long-suffering working families.

That’s what building a country that works for everyone really means.