Fat cats’ bonanza

Directors of the UK’s top listed companies are reportedly earning 120 times more than the average wage of their employees compared with 47 times more in 2000 according to Incomes Data Services (IDS).

CEOs pay soared by 21 per cent in the past year while UK employees average wages have failed to even keep up with inflation, highlighting the ever growing gap between what executives and their employees earn.

IDS said a director now typically earns ÂŁ2.43m a year. Official figures put the average salary at ÂŁ27,000.

A TUC report out on October 11 said there had been an 8 per cent drop in real earnings in the past seven years.

“These scandalous figures show how greedy fat cat bosses have been lining their own pockets while paying their staff peanuts,” said Steve Turner, Unite assistant general secretary.

“Supposed tougher measures on executive pay go nowhere near far enough to rein in these CEOs and put an end to exploiting hardworking people.”

 
In October last year, new pay reforms were brought in including the requirement for companies to put their pay policies to a binding shareholder vote at least every three years. Companies are now also required to be clearer about total executive pay packets.

 
Boardroom pay transparency

“What is needed is total boardroom transparency to abolish this greed. Hardworking families are struggling to heat their homes, put food on the table and clothe their children,” said Steve.

“It is totally immoral that bosses are rewarding themselves these huge salaries and bonuses. It stinks – it’s something you’d expect from Ebenezer Scrooge.”

IDS said the rise was driven by a 44 per cent rise in share awards, which were given as long term incentives and bonuses were also up by 12 per cent. Basic salaries were up less at 2.5 per cent – although this is still a whopping three times more than average wage rises.

“The pattern of pay growth highlights the complex make-up of directors’ remuneration,” said Steve Tatton, editor of the IDS report.

“Salary rises may be modest but this can be more than made up for by the receipt of incentive payments. When such incentives pay out, they can pay substantial sums, giving a significant boost to directors’ earnings.”

The best paid chief executives were in media, marketing and telecoms.