'Fat cat' bosses earn average yearly salary by lunchtime today
The bosses of FTSE 100 companies will earn the average UK salary by lunchtime today, according to data compiled by the High Pay Centre.
Dubbed “fat cat Wednesday” by campaigners, the typical chief executive of a large company will earn more than the £28,200 UK average salary by midday today – in some cases bosses can earn more than £1,000 an hour.
In 2015, a chief executive of a FTSE 100 company earned 129 times the salary of an average worker at their company, the report claims.
The median chief executive pay in 2015 was £3.97 million, although many bosses earned far more. The report lists Sir Martin Sorrell, chief executive officer of media agency WPP, as taking home £70.42 million, Tony Pidgeley, founder of builder Berkeley Group, as earning £23.3 million, and Reckitt Benckiser chief, Rakesh Kapoor, as receiving £23.2 million.
Meanwhile the national living wage for over-25s is currently £7.20 an hour. The High Pay Centre is calling for the mandatory publication of pay ratios to try and close the gap between workers and their bosses.
High Pay Centre director, Stefan Stern, says the government must act to reform chief executives’ pay. He says: “Our new year calculation is not designed to make the return to work harder than it already is. But ‘fat cat Wednesday’ is an important reminder of the continuing problem of the unfair pay gap in the UK.
“We hope the government will recognise that further reform to pay practices are needed if this gap is to be closed. That will be the main point in our submission to the business department in its current consultation over corporate governance reform.
“Effective representation for ordinary workers on the company remuneration committees that set executive pay, and publication of the pay ratio between the highest and average earner within a company, would bring a greater sense of proportion to the setting of top pay.”
A market-weighted index of the 100 biggest companies by market capitalisation listed on the London Stock Exchange. It is often referred to as “The Footsie”. The index began on 3 January 1984 with a base level of 1000; the highest value reached to date is 6950.6, on 30 December 1999. The index is “weighted” by how the movements of each of the 100 constituents affect the index, so larger companies make more of a difference to the index than smaller ones. To ensure it is a true and accurate representation of the most highly capitalised companies in the UK, just like football’s Premier League, every three months the FTSE 100 “relegates” the bottom three companies in the 100 whose market capitalisation has fallen and “promotes” to the index the three companies whose market capitalisation has grown sufficiently to warrant inclusion. Around 80% of the companies listed on the London Stock Exchange are included in the FTSE 100.