A recent report by the High Pay Centre has revealed that executives of FTSE 100 companies took home over £1 billion in pay and bonuses in the last financial year. This marks the third consecutive year of record pay, with the average chief executive earning 122 times the salary of the average full-time UK worker.
Executive Pay Steadily Rising
The analysis highlighted an almost 7% increase in median pay for FTSE 100 CEOs, climbing to £4.58 million from £4.29 million the previous year. This surge in executive compensation comes as many UK households continue to grapple with a cost-of-living crisis, exacerbating concerns about income inequality.
The report also noted an increase in long-term incentive payments (LTIPs), with 84% of FTSE 100 chief executives receiving these rewards last year, up from 81% in the previous year. The use of LTIPs significantly boosted payouts, particularly for executives at companies like Melrose Industries.
Melrose Industries Leads Pay Chart
Executives of Melrose Industries, known for its controversial 2018 acquisition of GKN, were among the highest-paid in the FTSE 100. Current and former CEOs Peter Dilnot and Simon Peckham received nearly £59 million between them last year, primarily through LTIPs. In total, Melrose paid £212 million to its executives, drawing criticism for what some have termed “robber baron capitalism.”
Melrose further faced backlash for awarding a £175 million executive bonus scheme launched in 2020, with large shares of the rewards going to its co-founders and former leadership team.
Gender Pay Disparity Among FTSE 100 Leaders
The report also shed light on gender disparities in executive pay. Female CEOs of FTSE 100 companies earned a median pay of £3.27 million last year, compared to £4.64 million for male counterparts. Only nine FTSE 100 companies were led by women for the entire financial year.
Calls for Regulatory Reforms
The High Pay Centre has called for reforms to executive pay regulations, emphasizing the need for fairer distribution of corporate wealth. It supports implementing changes such as worker-elected directors on company boards, enhanced corporate pay reporting, and the full introduction of Labour’s employment rights bill, which includes greater transparency and stronger worker protections.
High Pay Centre director Luke Hildyard stated, “These figures will feed a growing sense that low and middle earners don’t get a fair share of the wealth that their work helps to create, while those at the top take much more than they merit or need.”
With calls for reform growing louder, the UK government faces mounting pressure to ensure pay-setting processes reflect employee welfare and broader societal concerns.
