Top FTSE 100 bosses will earn more than average worker’s yearly wage by end of today

Pay gap branded a ‘source of national shame’ as inequality highlighted in new study

The average FTSE 100 chief executive was paid £3.46 million in 2018 (Getty)

The chief executives of Britain’s leading businesses will have been paid more than the average worker’s annual wage by 5pm on Monday, 6 January, new research has found.

A study compiled by the Chartered Institute of Personnel and Development (CIPD) and the High Pay Centre shows that FTSE 100 bosses will have taken home more than £29,559 within the first three working days of 2020.

It’s also been revealed that the average FTSE 100 chief executive was paid £3.46 million in 2018, equivalent to £901.30 an hour. In comparison, the typical full-time worker earned £14.37 an hour.

Business secretary Andrea Leadsom said the pay gap was “concerning” while Luke Hildyard, director of the High Pay Centre, described the UK as “one of the most unequal countries in Europe”.

The report suggested high pay will be a key issue in 2020 as this is the first year that publicly listed firms with more than 250 UK employees must disclose the ratio between chief executive pay and that of their average worker, and justify the reasons for such disparities.

The CIPD and High Pay Centre called on businesses not to treat the new reporting requirements as a “tick-box” exercise and to use it as an opportunity to fully explain chief executive pay levels.

Peter Cheese, chief executive at the CIPD, said: “This is the first year where businesses are really being held to account on executive pay. Pay ratio reporting will rightly increase scrutiny on pay and reward practices, but reporting the numbers is just the start.

“We need businesses to step up and justify very high levels of pay for top executives, particularly in relation to how the rest of the workforce is being rewarded.”

Ms Leadsom said the figures would be “eye-watering for the majority” of the UK’s working population, but suggested changes to the rules on reporting executive pay would help “increase transparency”.

“The numbers are better than they were – down a quarter since 2012 and 13 per cent on average since last year – but the situation is still concerning, especially in those cases where executives have been rewarded despite failing their employees and customers,” she said.

“Our world-leading legislation shines a light on excessive pay and forces companies to disclose and explain the pay of their CEOs, with new reforms this year to increase transparency around how directors meet their responsibilities and future plans to ensure companies cannot shy away from required reporting on executive pay.”

Tim Roache, the general secretary of the GMB trade union, called the findings “a source of national shame”.

But the director general at the Institute of Economic Affairs, Mark Littlewood, questioned the UK’s “obsession with high pay” and argued that “comparing CEO salaries to the average salary serves to stoke public hostility”.

It has taken three working days for FTSE 100 CEOs to surpass the annual earnings of the average worker in 2020 (Statista)

He added: “In today’s globalised economy, the role of the chief executive has become significantly more important; the successes, failures and sudden departures of CEOs can increase or diminish a company’s worth by billions of pounds – which can also result in the gain or loss of thousands of jobs.

“By continuing our obsession with high pay, we dismiss the achievements of successful CEOs which benefit employees and customers alike; and we distract ourselves from tackling the critical issue of low pay and the cost of living crisis.”

Additional reporting by PA