FTSE 100 bosses given average 16% pay rises

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Bosses at FTSE 100 companies took an average pay rise of 16% last year, taking them to 118 times the median wage of the average UK worker and widening the pay gap between executives and rank-and-file workers.

The average pay for bosses in the blue chip index is £3.91m, up £530,000 on the previous year, according to the annual study by the High Pay Center think tank.

The figures come after the government and the Bank of England called on employers to show restraint in raising wages in response to high inflation.

Average worker last year actual pay cutinflation exceeds wage increases.

If ministers really believe that high wages are causing an inflationary spiral, they may need to consider capping wages at the top and not everyone else.

The median pay of FTSE 100 bosses in the UK is 118 times the median full-time UK worker in 2022, 108 times in 2021 and 79 times in 2020, the study found.

But the rise in executive pay comes against a backdrop of calls from the City of London for further increases in board pay to help the UK compete with other countries, notably the US.

Chief executives of S&P 500 companies in the United States are paid far more than their British counterparts, with a median salary of $14.1 million by 2022, according to an annual study released this month by trade union federation AFL-CIO.

Julia Hoggett, chairman of the London Stock Exchange, said in May that British executives should be paid more if the country wanted to retain talent and prevent companies from moving overseas.

However, Gary Smith, general secretary of the GMB union, criticized the soaring “fat cat CEO pay” as “workers across industries are forced to picket lines to make ends meet”.

He added: “If ministers really believe that high wages are causing an inflationary spiral, they may need to consider capping wages at the top, not everyone else.”

AstraZeneca’s Pascal Soriot is the highest paid chief executive on the FTSE with a total pay of £15.3m. BAE Systems’ Charles Woodburn and BP’s Bernard Looney are paid more than £10m each, while CRH boss Albert Maniford Manifold, which is relocating its listing to the US, is also earning more than £10m.

The study covers the full compensation package of CEOs, including salaries, bonuses, pension benefits and vesting of shares under incentive plans.

Base salary typically makes up only a small portion of FTSE’s chief executive pay, with a large portion including performance-related bonuses and share awards, which increase in value if the share price rises. Shares of AstraZeneca, for example, have risen about 80% over the past five years.

According to the High Salary Centre, median pay for owners of mid-sized businesses in the FTSE 250 rose less than in the FTSE 100 – up £50,000 to £1.77m.

British Prime Minister Rishi Sunak has previously called for “softer” wage negotiations between workers and employers, while Bank of England Governor Andrew Bailey has warned against “unsustainable” wage increases as he tries to rein in inflation.

Downing Street said on Monday: “We will not tell private companies how to set their own wages. It is the onus on shareholders to hold these companies accountable.

“Anyone paying a good salary will be expected to justify themselves, especially when others are struggling.”

Labor declined to comment on the pay rises to curb inflation. Labor has previously spoken out about high executive pay, but leader Sir Keir Starmer is seeking to sideline business leaders as part of his attempt to reassure voters he will pursue economically credible policies.