By lunchtime on 4 January, top bosses at UK firms had made more money than the average UK worker earns in an entire year, according to the High Pay Centre.
The independent think tank has calculated that pay for top company executives returning to work this new year will pass the UK average salary of £28,200 by around midday on “Fat Cat Wednesday”.
Prime Minister Theresa May has previously expressed concerns over “an irrational, unhealthy and growing gap” between the pay of workers and executives. The UK Government is currently looking at whether to require companies to publish the ratio between the pay of the CEO and the average worker in the business.
The High Pay Centre said on Wednesday that its latest pay gap figures confirm that there are “dramatically different rates of pay at the top compared with what everyone else receives”.
Median pay for FTSE 100 CEOs in 2015 was £3.973m. Even if chief executives are assumed to work long hours with very few holidays, this is equivalent to a rate of pay of over £1,000 an hour. The “national living wage” for employees aged over 25 is £7.20 an hour.
High Pay Centre director Stefan Stern said: “Our new year calculation is not designed to make the return to work harder than it already is. But ‘Fat Cat Wednesday’ is an important reminder of the continuing problem of the unfair pay gap in the UK.”
Further reform of pay practices is necessary to help narrow this gap, Stern argued.
“Effective representation for ordinary workers on the company remuneration committees that set executive pay, and publication of the pay ratio between the highest and average earner within a company, would bring a greater sense of proportion to the setting of top pay,” he concluded.