Top executives in the UK have already earned more than the average UK annual wage this year, a think tank has said.
According to the High Pay Centre, it took less than four full working days for the median FTSE 100 CEO’s earnings to surpass the median wage for a full-time worker, with executives passing this benchmark by 9am last Friday (7 January).
The think tank said this was the first time since 2011 – when the High Pay Centre was established – that top executives had to work into a fourth day to make the same as the average worker.
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The centre, which bases its findings on company annual reports and government data, said average CEO pay fell 17 per cent to £2.7m in 2020, down from £3.25m the previous year.
It said this was in large part because of the temporary pay cuts and bonus cancellations announced by many firms at the start of the first coronavirus lockdowns.
The High Pay Centre said most FTSE 100 firms had yet to announce their CEO’s pay for the financial year ending in 2021; however of those that have, more than half (57 per cent) recorded an increase on 2020 levels.
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The organisation also polled individuals on their opinion of high earners, and found three-quarters (77 per cent) agreed that high earners have had advantages in life such as more expensive education, family money and connections.
The poll also found that three in five (59 per cent) disagreed with the statement that high earners do more valuable work than low- or middle-earners, while nearly two-thirds (63 per cent) disagreed with the statement that high earners worked harder than low- or middle-earners.
The figures come as many organisations and think tanks are warning that this year could see most employees’ pay packets squeezed by the increasing cost of living.
Despite labour shortages pushing up starting salaries, the Resolution Foundation warned before Christmas that households could see their incomes hit by £1,200 from April because of rising energy bills and taxes – dubbing 2022 as “the year of the squeeze”.
Torsten Bell, chief executive of the Resolution Foundation, said that while this year would begin “with Omicron at the forefront of everyone’s minds”, the economic impact of the variant would be short-lived.
“Instead, 2022 will be defined as the ‘year of the squeeze’,” he said. “The overall picture is likely to be one of prices surging and pay packets stagnating.”