13th October 2014
The bosses of the top one hundred listed UK companies earn 120 times the average pay of employees, according to a report by Incomes Data Services (IDS).
Despite the financial crisis, executive pay has increased much faster than average pay. In 2000, bosses of top companies earned 47 times more.
IDS said a FTSE 100 director now earns an average of £2.43m a year while official figures put the average annual salary at £27,000.
IDS says that bosses’ pay has risen by more than a fifth this year driven by a 44% rise in share awards while bonuses were also up by 12%. Basic salaries were £822,300 rising by 2.5%, though still more than for most employees.
Average earnings in the May to July period rose by 0.7% from a year earlier and the amount was actually lower when it included bonuses which rose by 0.6%.
The IDS report found that between 2000 and 2014 the median total earnings for FTSE 100 bosses rose by 278%, while the corresponding rise in total earnings for full-time employees was 48%.
Steve Tatton, editor of the IDS report, says: “The pattern of pay growth highlights the complex make-up of directors’ remuneration. 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 out substantial sums, giving a significant boost to directors’ earnings.”