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WORKERS would need to work 117 years to earn a chief executive’s annual salary, shocking new research into wages paid by Britain’s largest companies has revealed.
Shadow chancellor John McDonnell slammed the pay gap as “grotesque” and promised to “tackle the scourge of high pay” if Labour takes power.
Analysis of the stock market’s top 100 firms found the average executive salary was an eye-watering £3.46 million a year, down 13 per cent on 2018.
The average full-time worker earns a fraction of this amount, taking home £29,574.
The research, conducted by the High Pay Centre and the Chartered Institute of Personnel and Development (CIPD), was published yesterday in a report titled “Is everyone getting a fair slice of the cake?”
Commenting on the dossier, Mr McDonnell said: “Years of believing the market knows best has caused the grotesque levels of inequality we see today.
“In the same year that the United Nations rapporteur found that UK government policies have caused misery and hardship for millions, pay at the top continues to soar beyond anything most people could ever dream of earning.
Mr McDonnell pledged: “Labour will tackle the scourge of high pay while introducing a £10 real living wage as part of our pledge to end in-work poverty in a parliament.”
Luke Hildyard from the High Pay Centre said: “A slight fall in the pay of FTSE 100 CEOs is welcome and reflects improvements to the governance of the UK’s biggest companies, and a growing recognition of the need to address the rampant economic inequality in the UK.
“At the same time, CEO pay awards and the share of total incomes going to the very richest in society remain very high compared to the level of 20 years ago.”
CIPD’s Peter Cheese argued that although the gulf between top and bottom pay was slightly smaller this year, it was “still unacceptably wide” and undermined public trust in business.
He said: “We must question if CEOs are overly focused on financial measures and are being incentivised to keep share prices high rather than focusing on the long-term health of their business.
“Being a custodian for the business and its people over the longer term must surely be a chief executive’s ultimate duty, rather than simply focusing on short-term gain.
“We need to challenge excessive pay, especially when too often it doesn’t match up to company performance.
“Success is the collective endeavour of the many, not just the few at the top.”
GMB general secretary Tim Roache said: “It’s an absolute scandal the average worker will have to graft for more than a century to earn the same pay a CEO gets in just a year.
“Fat cats at the top are slurping the cream while working people struggle to make ends meet and feed their families.”
He called for a maximum pay ratio to be enshrined in law to ensure people are paid fairly.
Green MEP Alexandra Phillips called it “fat-cat day” and called for a maximum ratio pay of 10:1 so money was more evenly distributed and there was greater equality for workers.
“It’s outrageous that CEOs are earning a whopping 117 times what the average UK worker makes a year,” she said.
“What makes it even more incredible is that pay has fallen for top bosses by 13 per cent.
“Today, the average wage of a FTSE 100 chief exec has fallen to a rock bottom … £3.4m.
“It’s amazing that any of them manage to put bread on the table.
“How can still we have people in society being paid 100 times the average British wage?
“No individual needs to be earning such vast sums of money — particularly when there exists so much in-work poverty.”
In a report published today, Oxfam suggests a tax on the top 1 per cent of earners could raise £10 billion a year and reduce inequality in Britain.
The charity, which put out its findings ahead of a G7 meeting this weekend, found income inequality has risen in all G7 countries since the 1980s.
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