The United Kingdom’s top companies have reached new heights in executive compensation, according to a recent analysis from the High Pay Centre thinktank. The study found that the average CEO of a company listed on the Financial Times Stock Exchange (FTSE) 100 index received a 2.2% pay increase, bringing their median pay to a record-breaking £4.19 million. This marks a significant increase from previous years and highlights the growing disparity between the pay of top executives and the average worker.
The analysis also looked at the expected average pay for CEOs in 2023, which is projected to be even higher at £4.98 million – a 12.2% increase from 2022. This equates to a staggering £500,000 raise for these top earners. The highest paid CEO on the FTSE 100 list was AstraZeneca’s Pascal Soriot, who received a total of £16.85 million in compensation. Following closely behind were Erik Engstrom of RELX and Tufan Erginbilgic of Rolls-Royce, who both earned over £13 million.
In total, FTSE 100 companies spent a staggering £755 million on executive pay for 222 individuals, according to the High Pay Centre. This included nine companies that paid out over £10 million to individual executives, a significant increase from just four companies in 2022.
However, the study also revealed a stark gender pay gap among CEOs. Of the 11 women who served as CEOs for at least part of the year, only eight remained in their positions by the end of the financial year. Furthermore, female CEOs earned significantly less than their male counterparts, with a median pay of £2.69 million compared to the £4.19 million for male CEOs.
The High Pay Centre noted that the excessive spending on top earners by leading firms makes it challenging to justify pay increases for the wider UK workforce. They also pointed out that factors such as declining trade union membership, low worker participation in business decisions, and a business culture that prioritizes investors over other stakeholders have contributed to the growing pay gap between executives and workers.
Dame Julia Hoggett, CEO of the London Stock Exchange, has previously spoken out about the need for larger and more competitive pay packages for top executives. She stated that CEOs are being paid “significantly below global benchmarks” and warned that this could make it harder to attract top talent who may seek better remuneration elsewhere.
The High Pay Centre report concluded that while these developments have been beneficial for those at the top, it is questionable whether they are in the best interest of the country as a whole. The increasing pay gap between CEOs and the wider UK workforce raises concerns about income inequality and the distribution of wealth in the country.
