Even in post-Covid Britain, fatcat bosses are paid hundreds of times more than you
How much do you earn?
The Chartered Institute of Personnel and Development (I know, I hadn’t heard of it either) reckons average pay in the UK is £30,353, but this includes the pay of the biggest bosses.
Take away the top 10 per cent and the average comes down to around £12,000-£13,000 – as This Writer discovered a few years ago when I did the necessary calculations.
Is that about right for you, too?
If so, then the CIPD/High Pay Centre revelation that FTSE 100 CEOs – bosses of the top 100 firms on the stock exchange – earn only 119 times the £30K average wage instead of 120, as was the norm before Covid, will come as scant comfort.
Between 2018 and 2019, their pay fell by 0.5 per cent, from £3.63m to £3.61m.
That’s around 277 times the £13K average that I reckon is closer to what people generally receive.
Oh, and that’s not taking into account the fact that so many people have lost their jobs as a result of Covid – three million new arrivals on Universal Credit in four months.
The highest paid FTSE 100 CEO received a total pay package of £58.73 million. This is 1,935 times the median salary of a full-time UK worker.
Six firms paid their CEOs more than £10 million in total.
70 companies disclosed the pay ratio between their CEO and the median pay of their UK employees. The highest quoted pay ratio was 2,605:1 and the lowest was 15:1. The median was 84:1.
Performance-related pay policies also continue to pay out as a matter of course: 88 FTSE 100 companies paid their CEO an annual bonus in 2019, with total payments reaching £108.48 million. So-called ‘Long Term Incentive Plans’ (LTIPs) paid out at 81 companies, totalling £238.19m.
These are the highest-earning companies in the United Kingdom. They’re not short of a bob or two, yet their policy is to hoard the money among a very few shareholders and decision-makers, while the people who do the actual work receive very little in return.
And the report makes a very obvious point in these days of Covid-19 “We’re all in this together”-ness: very high CEO pay risks undermining the spirit of solidarity that many companies are trying to project as they battle against the impact of the coronavirus.
Clearly, we are not “all in this together” when top bosses are still raking in (in one case) nearly 2,000 times as much as their employees. Remember that many working people have had to take a 20 per cent pay cut, having been put on furlough, and three million more are now unemployed.
The CIPD and the High Pay Centre have called for companies to consider whether the scale of pay awards really reflects good business sense and the CEO’s individual contribution to the company’s success. They say remuneration committees should be reformed to ensure CEO pay awards are fair, proportionate and assessed in a way more reflective of way the the pay of the wider workforce is determined.
I say: fat chance!
The simple fact is that company pay is determined by the bosses, not the workforce as a whole, and they are never going to reform pay so other people receive more, if it means they receive less. They are all well-familiar with that old cliche about turkeys voting for Christmas.
The only measure that would force bosses to bring in fair pay is government legislation – and that will never happen under the Conservatives.
Labour – under Jeremy Corbyn – would have taken steps toward a system in which boss pay could not be more than 20 times that of workers. This is still a huge difference, but doesn’t that simply illustrate how massive the current injustice is?
No doubt Keir Starmer will get around to reversing that policy, if he hasn’t quietly done so already.
But there is considerable debate around the weaknesses in UK society that have been exposed by the Covid crisis and employment pay and conditions are a part of that.
It’s time you started to think about how your business could improve, with just a little more fairness and a little less greed at the top.
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I thought I’d reached the rock bottom of despair when we lost the general election. But, what with the daily revelations, scandals and events since, I’m almost losing the will to live!
Covid is the gift that just keeps giving for fatcat employers who are being allowed to shed thousands of jobs without scrutiny or penalty, to maintain their inflated salaries and dividends.
This leaves an employers market where the “sheeple” are told to be grateful that they have a job, just like the Victorian England envisioned by Ress-Mogg to name but one.