Pay for the bosses of the UK’s 100 biggest listed companies has increased to the highest level on record, with the average chief executive paid more than 100 times the average full-time worker in Britain.
As millions of households cut back on spending amid the cost of living crisis, analysis by the High Pay Centre showed median pay for a FTSE 100 chief executive increased from £4.1m in 2022 to £4.19m in 2023.
The campaign group said this was the highest level on record, although growth in chief executive pay was slower than in the past two years, when there had been a bounce after the height of the Covid pandemic.
Pascal Soriot, the chief executive of the drug company AstraZeneca, topped the list of highest paid bosses in the FTSE 100 for a second year running, collecting £16.85m, up from £15.3m in 2022.
AstraZeneca went through a shareholder rebellion earlier this year after announcing plans to increase Soriot’s pay to £18.7m this year – an increase over two years that is worth more than the average UK worker would receive in a century of full-time employment at 2023 average pay levels.
Soriot has defended his pay packet by arguing that it is important to attract his potential successor to the company by showing that the UK is a leading destination for the life sciences industry, while the company’s chair has said the deal will help stop the chief executive from quitting for a role in the US.
It comes after the chief of the London Stock Exchange called last year for UK bosses to be paid more in order to match US rivals. One of AstraZeneca’s top investors also said earlier this year that Soriot was “massively underpaid” after the company’s share price had outperformed many of its European peers in recent years.
However, the prospect of bumper pay deals in the City has stoked public anger as millions of households have suffered the biggest hit to disposable incomes within modern records, which date back to the 1950s, with average wages having largely failed to keep pace with soaring inflation over the past three years.
The figures from the High Pay Centre mean FTSE 100 pay grew from £4.42m to £4.98m – an inflation-busting 12.2% increase worth more than £500,000, amid a jump in the number of companies offering £10m-plus pay deals for top executives.
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Highlighting the gulf in pay between ordinary households and Britain’s highest-paid executives, the research showed that the median FTSE 100 chief executive is now paid 120 times the pay of a median UK full-time worker. The ratio was down slightly from 124:1 in 2022, but still higher than 108:1 in 2021.
Luke Hildyard, the director of the High Pay Centre, said: “Higher executive pay has been a key demand of business lobbyists in recent years. These figures indicate that this campaign has had some success, with shareholders at the biggest UK companies becoming more willing to wave through bigger payouts.
“The huge pay gap between executives and the wider UK workforce is a result of factors such as the decline of trade union membership, low levels of worker participation in business decision-making and a business culture that puts the interests of investors before workers, customers, suppliers and other stakeholders.
“These developments have been very good for those at the top but it is more questionable whether they are in the interests of the country as a whole.”