According to the High Pay Centre, a UK think tank researching business performance, the average FTSE 100 CEO made $3.7 million (£2.69 million) in 2020. This is 86 times the annual earnings of the average full-time worker in Britain – $42,900 (£31,500).
The average CEO’s paycheck declined by 17% in 2020, compared with the $4.43 million recorded in 2019. The think tank links the plunge with the Covid-19 pandemic.
“Undoubtedly, this lower level of pay is largely a consequence of the Covid-19 pandemic and the resulting economic shutdown. The pandemic has had a major impact on companies’ performance, albeit to varying degrees depending upon the sector in question.
“As performance-related pay tends to be tied to financial metrics such as returns to shareholders or company earnings, executive pay has fallen as a consequence,” it stated in a report published this week.
According to the findings, the highest-paid CEO made a total of $21.05 million in 2020, at AstraZeneca, a British-Swedish multinational pharmaceutical and biotechnology company and developer of the Covid-19 vaccine Vaxzevria. This is roughly 500 times the pay of the average UK worker, and 197 times the salary of the median UK employee of AstraZeneca.
“Very high CEO pay reflects a wider gap between rich and poor in the UK than in most other European countries,” according to High Pay Centre director Luke Hildyard.
“The inequalities exposed by the pandemic and the volume of public money used to protect large businesses could strengthen the argument for measures to contain top pay and rebalance extreme income differences,” he said.
The GMB union, the UK’s general trade union, which has more than 600,000 members, voiced similar concerns.
“The pandemic has highlighted the massive inequalities that exist in our society. If this government is serious about a levelling up agenda, ministers must make sure our National Health Service and local government workers get a proper pay rise – while legislating to close the obscene pay gap in the private sector,” GMB general secretary Gary Smith said, as cited by the Guardian.
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