by Salaries for the CEOs of the UK’s 100 largest listed companies have risen to their highest levels ever recorded, with the average CEO now earning more than 100 times more than the average full-time employee in the UK.
As millions of households cut spending amid the cost of living crisis, analysis by the High Pay Centre found that the average salary of a FTSE 100 chief executive rose from £4.1 million in 2022 to £4.19 million in 2023.
The campaign group said this was the highest level ever recorded, although the growth in CEO pay was slower than in the past two years, when there was a recovery following the peak of the Covid pandemic.
Pascal Soriot, CEO of pharmaceutical company AstraZeneca, topped the list of highest-paid bosses in the FTSE 100 for the second year in a row, earning £16.85 million (2022: £15.3 million).
AstraZeneca faced a shareholder revolt earlier this year after the company announced plans to increase Soriot’s salary to £18.7 million this year – a rise over two years worth more than an average British worker would receive in a century of full-time work on an average salary in 2023.
Soriot defended his salary, arguing that it was important to attract his potential successor to the company by showing him that the UK was a leading location for the life sciences industry. The company’s chief executive, however, said the deal would help prevent the chief executive from leaving his post and taking a job in the US.
Previously, the head of the London Stock Exchange had called last year for British bosses to be better paid to keep up with US rivals. One of AstraZeneca’s top investors said earlier this year that Soriot was “massively underpaid” after the company’s share price had outperformed that of many European rivals in recent years.
But the prospect of big pay deals in the City has sparked anger among the population, with millions of households facing the biggest drop in disposable income in the City’s recent history, which stretches back to the 1950s. Over the past three years, average wages have struggled to keep pace with soaring inflation.
According to figures from the High Pay Centre, salaries at FTSE 100 companies rose from £4.42 million to £4.98 million – an inflation-adjusted increase of 12.2 per cent worth more than £500,000. This is also due to the increasing number of companies offering their top executives salaries of over £10 million.
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The study highlighted the pay gap between ordinary households and the highest-paid UK executives, showing that the average FTSE 100 chief executive is now paid 120 times the salary of the average full-time UK worker. While the ratio is slightly lower than 124:1 in 2022, it is still higher than 108:1 in 2021.
Luke Hildyard, director of the High Pay Centre, said: “Higher executive pay has been a key demand of business lobbyists in recent years. These figures suggest that campaign has had some success, with shareholders in Britain’s biggest companies more willing to approve higher payouts.
“The huge pay gap between executives and the wider UK workforce is the result of factors such as declining union membership, low levels of worker participation in company decisions and a corporate culture that puts the interests of investors ahead of those of employees, customers, suppliers and other stakeholders.”
“These developments have been very good for those at the top, but it is questionable whether they are in the interest of the country as a whole.”
