Pay packets for top executives of FTSE 100 companies reached “stratospheric” levels, as research shows the gap between low-paid workers and top directors has grown even starker.
According to a report from the Trades Union Congress (TUC), the average yearly pay for FTSE 100 directors increased by 47 per cent between 2010 and 2015, hitting £3.4m.
By contrast, average wages for workers rose just 7 per cent over the same period.
The report also found that an average FTSE 100 top director earned a year’s worth of the minimum wage in a day.
Executive pay has been in the spotlight recently, after prime minster Theresa May pledged to curb the excessive pay top bosses receive.
Frances O’Grady, TUC general secretary said the findings highlight why Theresa May must deliver on her promise to tackle executive pay, by putting workers on company boards and remuneration committees.
“While millions of UK families have seen their living standards squeezed, directors’ pay has reached stratospheric levels.”
She said putting workers on boards would inject a “much-needed dose of reality” into boardrooms and help put the brakes on the multi-million pay packages that she claimed have damaged the reputation of corporate Britain.
Britain’s highest paid chief executive, Martin Sorrell, who heads up the advertising and public relations company WPP, took less than 45 minutes to earn what an average UK worker makes over an entire year, according to the trade union body.
Mr Sorrell was paid £70m in 2015, which is more than 2,500 times the average UK salary, and in 2015 he was paid the equivalent of £38,437 per hour.
Britain’s second highest paid boss Tony Pidgley, chief executive of the Berkeley group, was paid £23.2m in 2015, while Rakesh Kapoor of the Reckitt Benckiser group was paid just under £23m.
Ms O’Grady also called on the government to compel firms to disclose full information about employee pay across the company, and the ratio between the chief executive pay and the average worker in the business, a move heralded by think tank the High Pay Centre.
She pointed to academic research which found companies with high pay inequality between bosses and workers perform less well.
“But employees and investors do not have access to robust information that would allow them to assess the gap between top directors and staff in the rest of their company.”