Boardroom pay just gets bigger and bigger, says TUC
Forty nine minutes after returning to work after the 2013 New Year break Britain's highest paid director earned as much as a worker on the living wage earns in a year, according to new TUC research looking at directors' pay in Britain's top 350 companies.
Simon Peckham, chief executive of investment firm Melrose, received more than £31m (£31,157,399) or £119,836 a day. This is 2,238 times more than a worker on the living wage of £7.65 an hour who worked 35 hours a week.
The top pay research contained in Executive Excess was provided by independent researchers Incomes Data Services. It covers the year ending April 2013 and shows that across the FTSE 100 the average (median) total earnings for the highest paid director was £3,195,353 – 230 times an annual full-time non-London living wage.
Companies with high inequality between top pay and that of the rest of their staff perform less well, according to research. But employees and investors do not have access to robust information that would allow them to assess the gap between top directors and staff in the rest of their company. The TUC is calling on the government to compel firms to disclose full information about employee pay.
Only 39 out of 288 companies (14%) asked by the TUC to provide sufficient data to make an accurate calculation of the ratio between director and staff pay even replied to the request. A third of them provided no more information than was in their annual report.
At present companies are only required to publish a figure for the total cost of staff remuneration and the number of staff they employ. But while these totals allow calculation of a figure for average pay, different companies compile the data in different ways. For example, some include overseas staff based in countries where pay might be higher or lower than the UK. Some companies include contractors and some do not. And a crude mean of this type only reveals what an average staff member earns a year without taking into account whether they work full or part-time.
TUC General Secretary Frances O'Grady said: “While most are suffering continuing cuts in their living standards despite the recovery, boardroom pay just gets bigger and bigger every year. It is obscene that anyone needs to earn more than 2,000 times the living wage."