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TUC: The UK’s highest paid CEO earns the average annual salary in under 45 minutes

It took Britain’s highest paid chief executive, Martin Sorrell, less than 45 minutes to earn what an average UK worker earns over an entire year, according to new TUC analysis of FTSE 100 directors’ pay published yesterday (Sunday).

Mr. Sorrell, CEO of WPP, was paid £70 million in 2015 – more than 2,500 times the average UK salary.

The study shows that Mr. Sorrell’s salary in 2015 was the equivalent of £38,437 per hour. His annual salary could have paid the wages for 2,218 nurses, 1,920 paramedics, or 4,479 teaching assistants.

The TUC’s analysis also reveals:

  • The median total pay (excluding pensions) of top FTSE 100 directors increased by 47% between 2010 and 2015, to £3.4 million. By contrast, average wages for workers rose just 7% over the same period and are still way down in real terms on the pre-crash level.
  • In 2010, the average FTSE 100 boss earned 89 times the average full-time salary. By 2015, this had risen to 123 times.
  • The gap between low-paid workers and top directors is even starker. The average FTSE 100 top director earned a year’s worth of the minimum wage in a day.

The TUC says the findings highlight why Theresa May must deliver on her promise to tackle executive pay, by putting workers on company boards and remuneration committees.

The TUC also wants the government to compel firms to disclose full information about employee pay across the company, and the ratio between the CEO’s pay and the average worker in the business.

Companies with high pay inequality between bosses and workers perform less well, according to academic research. 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, says the TUC.

TUC General Secretary Frances O’Grady said:

“While millions of UK families have seen their living standards squeezed, directors’ pay has reached stratospheric levels.

“These shocking new figures show why Theresa May must deliver on her promise to put workers on company boards.

“This would inject a much-needed dose of reality into boardrooms and help put the brakes on the multi-million pay packages that have damaged the reputation of corporate Britain.  

“Other European countries already require workers on boards, so UK firms have nothing to fear. It improves performance and contributes to companies’ long-term success.”

NOTES TO EDITORS:

  • The top five highest-paid FTSE 100 directors are:

Director

Company

Total remuneration minus pension contribution

Sir Martin Sorrell

WPP

 £ 69,956,000.00

Tony Pidgley

Berkeley Group Holdings PLC

 £ 23,156,000.00

Rakesh Kapoor

Reckitt Benckiser Group PLC

 £ 22,926,010.00

Jeremy Darroch

Sky PLC

 £ 16,741,435.00

Flemming Ornskov

Shire

 £ 15,040,508.00

All figures for executive pay are taken from their respective companies’ most recent annual reports at the end of May 2016. The figure for annual total remuneration minus pension contributions has been used. Pension contributions have been subtracted for comparability with the other earnings figures used.

  • The annual median salary UK figure for full time employees is £27,645. Average annual earnings, along with pay for nurses, paramedics, and teaching assistants, are from Table 14.7a, Annual pay - Gross (£) - For full-time employee jobs: United Kingdom, 2015 of the ONS’ Annual Survey of Hours and Earnings, 2015.
  • Hourly and daily pay rates, and annual national minimum wage salaries are calculated assuming a 35 hour week, 52 weeks a year.
  • Research showing the link between pay gaps within companies and company performance includes:  Pedro Martins,Dispersion in Wage Premiums and Firm Performance, Centre for Globalisation Research Working Paper No. 8 April 2008 and Olubunmi Faleye, Ebru Reis, Anand Venkateswaran, The Effect of Executive-Employee Pay Disparity on Labor Productivity, EFMA, Jan 2010
  1. All TUC press releases can be found at www.tuc.org.uk 
  2. Follow the TUC on Twitter: @The_TUC and follow the TUC press team @tucnews
  3. Congress 2016 will be held in the Brighton Centre from Sunday 11 September to Wednesday 14 September. Media passes can be obtained by visiting www.tuc.org.uk/MediaCredentials2016 and completing an online form. The deadline for free accreditation passed on 23 August. Applications will now be subject to a late processing fee of £75.

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