What cost of living crisis? Boardroom pay soars despite flatlining economy

The economy barely grew through the course of 2022 and the FTSE also stalled, but still bosses netted substantial pay rises as their employees suffered through a generation pay crisis, writes James Moore. What possible justification can there be?

Pay for the UK’s top bosses surged last year, according to new figures (Victoria Jones/PA) (PA Wire)

Cost of living crisis? What cost of living crisis? There was nothing of the kind evident in the British boardroom last year. Its denizens appear to have been completely oblivious to the generational squeeze blighting the lives of just about everyone outside their office windows.

With the pandemic out of the way, pay setting remuneration committees (RemCos) got back to business as usual, said business being the construction of pay packages bearing no relation to the economy or the perfromance of the stockmarket, let alone the real world, by handing CEOs a median rise of 16 per cent. The number comes courtesy of the High Pay Centre, a non partisan think tank.

At this point, some context is due. In 2022 the FTSE 100 posted a gain of roughly 1 per cent. The UK economy grew by around 4 per cent but that compares to the Covid impacted year of 2021. The Office for National Statistics notes that through the course of 2022, UK plc barely grew at all. Its Annual Survey of Hours & Earnings (ASHE), meanwhile, shows that the median full time worker’s pay increased by just 5.7 per cent. Inflation in the year to December 2022 came in at 10.5 per cent. So the CEO about town enjoyed not only a rise in absolute terms but, more importantly, a rise in real terms. Based on an analysis of the official data, the TUC concluded that workers’ inflation adjusted pay fell by 3 per cent.