According to a report by the High Pay Centre, FTSE 100 chief executives (CEOs) earn 183 times more on average than a full-time worker.
The data shows that in 2014 top CEOs in the UK earned on average £4.964 million, quite a bit higher compared to median pay of £27,195 for a full-time employee.
Despite the pay gap not being that different from 2013, it is still much bigger than in 2010, when the UK’s top bosses earned £4.129 million.
Deborah Hargreaves, director of the High Pay Centre, said: “Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives,
“It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest.
Since 2013 publicly traded companies have been required to publish a single figure on their top exec’s salary and shareholders have more powers to hold companies to account over executive pay.
However, despite the reforms requiring companies to publish pay details, “it seems highly unlikely that the gap between CEOs and other workers will close in the foreseeable future,” said the report.
“The coalition Government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket.,” Hargreaves said.
Adding:
“However it’s clear that these reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.”
Inequality is reaching “stratospheric levels”
TUC general secretary Frances O’Grady said: “With top bosses now earning 183 times more than the average full-time worker, inequality is reaching stratospheric levels.
“After years of falling living standards it is a disgrace that top execs are taking an even bigger share of the rewards of growth. We need a recovery that works for the many and not just the few.
“Ordinary employees need to be included in workplace pay committees to add some common sense and reality to boardroom pay decisions. They should not be a closed shop for an elite who are only interested in looking after their own.”
Video – Income Inequality
Income inequality highlights the gap between the highest, middle, and lowest earners in the world, a country, city, etc. The term includes the pay gap between genders, racial, ethnic, and academic groups.