FTSE 100 bosses earn UK average salary in three days, says High Pay Centre

Bosses of Britain's biggest companies will have made more money in 2024 by lunchtime on Thursday than the typical worker will all year, research claims.

By 13:00 GMT, the pay of FTSE 100 chiefs will have overtaken the £34,963 annual median wage for full-time workers, the High Pay Centre says.

Including pensions, top bosses' average reward amounts to £3.81m per year, the centre says.

That works out to £1,170 per hour - 109 times the average full-time worker.

Top City lawyers will have to wait until the beginning of next week to surpass the median worker's annual pay.

Executives at companies listed on the bigger FTSE 350 have a median pay of £1.32m, so they will need to work until 10 January for their pay to overtake the annual pay of the typical UK worker, according to the High Pay Centre.

Leading bankers overtake the average worker's pay on 17 January.

The calculations are based on salaries published in companies' annual reports.

The Trades Union Congress (TUC), which represents 48 member unions, said the figures were a sign that the UK faced "obscene levels of pay inequality".

But Prof Len Shackleton from free market think tank the Institute of Economic Affairs said that cracking down on chief executives' pay would "undermine British competitiveness" and lead to higher tax bills for everyone.

"A CEO can make, or break, a company and therefore it's unsurprising they are paid generously," he said.

"Top earners pay stonking amounts in taxes: the top 1% of all earners in this country pay almost 30% of income tax. If we somehow stopped these people earning large amounts, many of them would leave the country and we would all have to pay higher taxes to compensate."

High Pay Centre director Luke Hildyard said the figures called into question claims that top earners in Britain were not paid enough.

"When politicians listen to these misguided views, it's unsurprising that we end up with massive inequality, and stagnating living standards for the majority of the population," he said.

Throughout 2023, leading figures in finance and business called for higher pay for chief executives in the UK.

They pointed to higher compensation in countries such as the US, where the median pay for S&P 500 bosses was more than $14m (£11.06m) in 2022.

In December, money management giant Legal and General Investment Management adjusted its executive pay guidelines to permit firms it invests in to offer more generous incentive payments.

The head of the London Stock Exchange, which has been passed over by some UK firms opting to list in the US, has also argued that low chief executive pay levels create a risk to the UK economy.

A spokesperson for the CBI business trade body, which represents some of the listed companies, said: "High pay is only acceptable when matched by exceptional performance. Firms should also always demonstrate how executive pay links to the delivery of company strategy.

"All businesses will be acutely aware of the sensitivities around executive rewards, particularly against the backdrop of a serious cost-of-living squeeze."

The calculations by the High Pay Centre assumed that chief executives work 62.5 hours a week, based on a study from the US by Harvard Business School.

This equates to 12.5 hours a day, not including weekends and bank holidays in England and Wales, which is how the think tank calculated the hourly pay of £1,171.