By @Max12to1

After two years, our reporting of #FTSE100 CEO pay and pay ratios is complete. We’ve shown the bosses gouging millions for themselves while the UK falls to pieces. But what else have we learned?

The final figures are:

Total CEO pay = £429,719,636.

Average CEO pay = £4,297,196 p/a.

= £82,638 every week.

= £358,100 every month.

Pay ratio rolling averages:

CEO:AVG UK pay (£35,464 p/a) = 132:1.

CEO:MIN UK pay (£19,772 p/a) = 234:1.

We started looking at #FTSE100 CEO pay in October 2021 and reported the Single Total Remuneration Figure from the latest company accounts. We proceeded in alphabetical order so as not to single out any sector, or particular companies. This is what we uncovered.

Only 5 companies paid their CEOs less than £1 MILLION a year and none of those paid less than half a million. It became clear that being a CEO of a #FTSE100 company gets you a decent lottery-sized win every year. There appears to be no serious link to performance.

Executive pay in the UK’s leading companies is entirely divorced from any sense of decency or appropriateness – and from what is going on in the rest of our struggling economy. As the #CostOfLivingCrisis grinds on for millions, these figures are pure insult. 

For a little historical context, a telling statistic from this 2013 academic paper (see extract below) shows when the rot set in for the UK.

And for a bit more context on the ‘Cult of the CEO’ and how it arose, this article‘(“How McKinsey Destroyed the Middle Class”) is instructive.

Looking more broadly, we have to look at structural changes that took place from the 1980s onwards to see what really took the lid off executive pay. In short, the story of the past 40 years+ has been the continuous and relentless victory of profit over people.

It is this victory that has allowed a much greater proportion of economic rewards to “gush up” to the wealthiest, including the senior executives of #FTSE100 companies.

It should also be remembered that the incomes of the top 1% (such as #FTSE100 CEOs) will quickly convert to assets (as it’s not possible to consume such riches quickly) so it’s not just income #inequality that’s being driven up, it is also wealth #inequality.

At the other end of the scale, we know that low pay in the UK is characterised by uncertain hours and general precarity. The full-time low pay figures we used in our project were, if anything, overstating what those on minimum wage typically take home.

And, of course, those suffering most from the damage and indignity of low and precarious pay tend to be young people, women, disabled people, and those from minority and marginalised communities – all of which further divides and weakens our society.

Returning to top pay, it is the sheer scale of executive excess that is hard to grasp but we had a go at conveying this. As we showed quite early on, after reporting 35 #FTSE100 companies, compared to frontline workers, CEO pay is almost off the graph. 

But #FTSE100 CEO pay is also astronomical when compared to the pay of other “top people”, as we showed after reporting 40 companies. 

Business is clearly valued far above health, education, security, and justice. The CEOs are also paid far more than our politicians (tiny violins there, maybe…) – but no wonder the UK is in such a mess. Our priorities are simply – and massively – all wrong. 

Our social fabric is torn and shredded. The CEOs and the #FTSE100 are not wholly to blame but they are significant drivers of #inequality. Only half the #FTSE100 pay the real #LivingWage according to the Living Wage Foundation.

They can claim to be progressive on any number of social issues but if they have CEO pay in the millions and pay ratios in the hundreds-to-one, then they are turbo-charging #inequality and they remain a significant part of the problem.

The City of London and these companies cannot reform themselves. The Golden Handshakes and Goodbyes are still happening. There is still the lame insistence that governance codes and shareholder pressure will work. They won’t. It’s a lie. Our figures prove it.

Reforms will need underpinning in law. We have legislated around minimum pay, so why not around maximum pay? We must democratise these vast companies in favour of employee and customer interests. In short, we need a new and far more equitable business model.

We have proposed a national maximum pay ratio of 12:1, that no one should earn less in a year than their top boss earns in a month. At the very least we hope this provokes thought and debate about what really is fair – in the UK (and beyond.

If the UK fails to become a fairer society, we will face a future of plutocracy and immiseration. We will become ever more like the USA and other failing states where #inequality has made them weak, violent, and unstable.

We have succeeded before. We managed to drive down #inequality in the middle decades of the 20th century. And, it should be noted, the falls in the incomes of the richest had to fall furthest and fastest. Again, the process needs to start with them. 

But we want to finish on a positive note and offer some ideas for how people can support and be part of the fight for a more #equal UK, a fairer country that we can be proud of – instead of the shame and despair that most of us probably feel at the moment.

If you want to keep across the subject of excessive UK executive pay, then @HighPayCentre are the people to follow.

And if you want to campaign more broadly on #inequality, then we recommend @equalitytrust who always have a range of initiatives on the go.

For considered and deep thinking on issues of fairness, we recommend the @fairnessfdn who produce regular polling and other interesting outputs on a regular basis.

If ethical business and governance models are of particular interest, we recommend taking a look at the work of @CooperativesUK, @EmployeeOwned, and @SocialEnt_UK.

We also recommend the work of @We_OwnIt because greater public ownership of public services and utilities will be required if we are to provide life’s essentials at affordable cost across the UK. Privatisation has been a total disaster and must be reversed. 

Moving into the political sphere, we recommend supporting or joining campaigns for a more democratic political system, either @MakeVotesMatter or @electoralreform or @getprdone or @CompassOffice.

If none of the above appeals to you, then maybe just have a chat with friends, family, or colleagues about what they think is “fair”. Maybe run the 12:1 idea past them and see what they say. In our experience, it can lead to some very interesting discussions.

We’d like to give a huge thank you to @dannydorling for his unstinting support of this project, and also to @ProfRGWilkinson and @ProfKEPickett for inspiration over many years.

And finally, we would like to thank all of you who have followed us, read our tweets, liked them, shared them, argued with them, and generally engaged with our work. As a final act of solidarity, please do share this thread as widely as possible.

This article is based on a 32-part thread on twitter/X and is reproduced here with the permission of the authors.

Main image: https://www.flickr.com/photos/59937401@N07/5474155241. Creator: Images Money. Licence: CC BY 2.0 DEED Attribution 2.0 Generic.