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“At 5% of FTSE 350 firms, the CEO earns over 200 times the median worker’s pay. That’s not a pay gap — that’s a chasm.”

We’ve known for years that the gulf between bosses and workers has become grotesque.

But the latest analysis of FTSE 350 pay ratios reminds us just how vast — and entrenched — that inequality has become.

In 2023/24, the median CEO earned 52 times what the average full-time UK worker earns.

For those on lower pay, it’s worse: the typical CEO made 71 times the pay of a worker at the 25th percentile.

In the FTSE 100, these ratios shoot up to 78:1 and 106:1 respectively.

And in some companies, they’re far beyond that: at five per cent of firms, CEOs are pulling in more than 200 times the pay of the average worker.

This isn’t just unjust — it’s unnecessary.

There was a time when mainstream economists and even business leaders took seriously the idea that there should be a ceiling on executive pay.

Legendary management thinker Peter Drucker argued that 20:1 was a reasonable upper limit — warning that greater gaps would undermine trust and social cohesion inside companies.

In the 2010s, there were political proposals in the UK and US alike to enshrine this kind of limit in law.

So what if we actually did it?

The 20:1 thought experiment

Imagine a company where the CEO could earn no more than 20 times the lowest-paid full-time worker.

At current minimum wage levels (£12.21/hour in the UK), a full-time salary is around £23,837. Under a 20:1 cap, that would allow a CEO to earn £476,730 — not exactly hardship. But that’s a far cry from the £3.8 million median pay of FTSE 100 CEOs in 2023.

To stay within the 20:1 cap, companies would have two real options:

1. Lift up the bottom — raise wages across the workforce, especially at the lower end.

2. Reign in the top — reduce excessive executive compensation.

Either outcome would likely improve long-term productivity, morale, and equity — especially when coupled with redistributing excess profits as worker bonuses, investments in training, or more secure jobs.

Models that work

This isn’t a utopian dream. It’s a working reality in some firms — just not many in the FTSE.

• John Lewis operates as a worker-owned partnership. No one there earns more than 75 times the average pay — and executive pay was recently cut to preserve jobs.

• The Mondragon Corporation in Spain, a network of cooperatives, has long maintained a CEO-to-worker ratio between 6:1 and 9:1.

• In the US, Portland, Oregon imposes higher corporate tax rates on companies with excessive pay gaps — an idea the UK could adopt tomorrow.

Meanwhile, B Corporations (which must meet social and environmental standards) are more likely to cap internal pay ratios. In many of these firms, the gap between top and bottom is under 10:1.

Why aren’t we doing the same?

The justifications don’t hold

The standard argument is that we need sky-high pay to “attract talent.”

But five years of pay ratio disclosures show no clear link between performance and pay.

CEOs didn’t get richer because they were better — they got richer because they could.

That’s the deeper issue.

And meanwhile, the workers who generate actual value — the shop staff, drivers, cleaners, call centre reps, junior engineers — are paid just enough to survive.

In too many cases, not even that.

From chasm to common sense

If the wealth generated by a company is shared more fairly, you get lower turnover, better morale, and more sustainable growth.

This isn’t anti-business — it’s anti-extraction.

A 20:1 economy would reward real contribution, foster internal solidarity, and leave room for investment in people and purpose.

Instead, we’re stuck in a system where 28 per cent of FTSE 350 firms pay their CEOs more than 100 times the lower-quartile worker’s wage — and nine percent of them pay more than 200 times.

In a healthy society, these would be red flags.

Here, they’re business as usual.

We can’t afford to let that stand.

The next time a company tells you it’s doing everything it can for its workers, ask them a simple question: how many worker lifetime salaries does your CEO earn in a year?

Now learn more

The High Pay Centre will be holding an informal call to discuss the report’s findings tomorrow (June 17, 2025), from 11am until midday – online (link available through online registration)

At the event, HPC researcher Paddy Goffey will present key findings from the report.

This will be followed by an open discussion in which audience members will be invited to share their reflections and responses.

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