A leading UK think-tank estimates that top CEOs will need to work for less than a week – just 34 hours – to surpass the median yearly earnings of a typical British worker in 2021.
Pay for top CEOs today is about 120 times that of the typical UK worker, says the London-based High Pay Centre, which focuses on corporate governance and the causes and consequences of economic inequality.
This means that the pay gap between bosses and employees continues to widen markedly. Estimates suggest CEO pay was around 50 times that of the average worker at the turn of the millennium, and 20 times that of the average worker in the early 1980s.
Concern about the governance of big businesses
“These figures will raise concern about the governance of big businesses and whether major employers are distributing pay in a way that rewards the contribution of different workers fairly,” the centre’s director, director Luke Hildyard, said.
“They should also prompt debate about the effects that high levels of inequality can have on social cohesion, crime, and public health and wellbeing.”
He added: “Factors such as the increasing role played by the finance industry in the economy, the outsourcing of low-paid work and the decline of trade union membership have widened the gaps between those at the top and everybody else over recent decades.”
But times are now (slightly) tougher for the bosses
The think-tank based its annual calculations on analysis of disclosures in companies’ annual reports, combined with government statistics.
But in a sign that times have got tougher for CEOs at FTSE 100 companies (although not by much), the High Pay Centre disclosed that last year top executives had to work just 33 hours – one hour less than the estimate for 2021 – in order to surpass the median yearly earnings of a typical British worker.
This is because CEO pay levels are remaining essentially flat, while pay for UK workers has increased slightly.
Median FTSE 100 chief executive pay was £3.61-million (AUD6.31-million) in 2019, the last year for which a full set of data is available, the High Pay Centre said.