Chief executives of FTSE 100 businesses will have made more money by Monday midday than the average worker in a year. This is a clear example of the widening gap in executive compensation. The High Pay Centre, a campaign group that raises awareness of executive pay inequality, has released a report showing that the typical compensation for FTSE 100 chief executives is £4.22 million, 113 times the median yearly salary of a full-time employee, which is £37,430.
In terms of numbers, how significant is the pay gap?
The substantial disparity implies that FTSE 100 CEOs will have outperformed their staff members’ total yearly compensation by approximately 11:30 a.m. on the third working day of 2025. The milestone was reached this year at 1 p.m. on the third working day, a little earlier than in 2024. The data highlights the corporate elite’s quick wealth accumulation compared to typical workers’ sluggish pay increases.
According to data released by businesses, employee salaries increased by 7% over the previous 12 months. Chief executives’ salaries, however, increased by a more moderate 2.5 per cent. Despite this, executive remuneration is still at all-time highs, indicating a widening pay disparity between top and bottom-level managers. There have been demands for steps to close the rising gap in executive compensation.
What Do Unions and Politicians Have to Say?
The widening disparity has prompted unions and politicians to call for urgent action. A spokesperson for the Trades Union Congress (TUC) voiced concerns, highlighting the plight of low-paid workers still struggling with the cost-of-living crisis. “Every working person plays a part in producing Britain’s wealth. But while millions of low-paid workers are still feeling the effects of the cost-of-living crisis, people at the top are taking more than their fair share,” the spokesperson said.
The High Pay Centre’s annual study has consistently drawn attention to this issue, showing how much the gap between corporate leaders and their staff has grown over the decades. With many workers facing financial challenges, the report reinforces calls for policy changes to address executive pay inequality.
Who Are the Top Earning Executives?
Among the highest-paid FTSE 100 executives is Pascal Soriot, CEO of AstraZeneca, who has topped the list for several years. In 2024, Soriot received an impressive £18.7 million compensation package despite shareholder objections. Other well-compensated executives include Erik Engstrom, CEO of the data company RelX, and Tufan Erginbilgiç, head of Rolls-Royce, both of whom received £13.6 million in 2024. These figures starkly contrast their employees’ salaries, highlighting the extent of the executive pay inequality.
What Are the Calculations Behind the Pay?
The median salary of £4.22 million for FTSE 100 executives translates into an hourly pay rate of £1,298.46, or nearly £22 a minute. The High Pay Centre assumes these executives work 62.5 hours a week. By comparison, many employees in the UK work 40-hour weeks, making the gap even more apparent when broken down into hourly pay.
While some argue that high pay for top executives is necessary to attract the best talent, unions and activists have heavily criticized this reasoning. They contend that the wealth generated by these companies should be more evenly distributed. In 2023, the head of the London Stock Exchange even argued that British firms should pay their executives more to stay competitive with their American counterparts.
How Are Unions and Business Groups Reacting to Worker Pay?
Unions and business groups have clashed over executive pay. The Tech represents millions of workers and has expressed hope that the Labour government’s employment rights bill could improve workers’ bargaining power and job security. It is also an opportunity to push more people towards union membership, potentially strengthening workers’ rights in the face of rising income inequality. However, business groups have vigorously opposed the bill, arguing that it would lead to higher costs for businesses and ultimately force them to raise prices.
Why is There a Call for Change?
A director of the High Pay Centre has warned that the growing financial disparities between top executives and average workers are fueling political division and unrest. The director advocates for the inclusion of workers on corporate boards as a means to close the gap between executives and their employees.
“A feeling that the economy works for the enrichment of a tiny elite at the expense of wider society is an underrated cause of populist anger and support for extremist politics,” the director said. “Policymakers who fail to address this inequality are storing up some big problems for the future.”
As discussions about executive pay and worker rights continue to unfold, it is clear that executive pay inequality is not only an economic concern but has significant social and political implications. The debate will likely intensify in the coming years as the gap between corporate bosses and their employees grows ever wider.
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