A report from the CIPD and the High Pay Centre published in August 2017 examines FTSE100 CEO pay packages, which show that rewards at the top have dropped by almost a fifth, but still remain extraordinarily high.
The report looks at how CEO pay in the UK’s largest firms has changed between the financial year to 2015 and the financial year to 2016. It finds that over this period, FTSE100 CEO remuneration has fallen by 17%, from £5.4 million.
However, while there has been a significant drop in CEO pay, it would still take the average UK full-time worker on a salary of £28,000 (median full-time earnings) 160 years to earn what an average FTSE100 CEO is paid in just one year. Although the average pay packages of the 25 highest paid CEOs have dropped by 24% to £9.4m in 2016, rewards for the 32 lowest paid chief executives in the FTSE 100 have increased as firms ‘chase the median’.
As a FTSE100 CEO, it is more likely that your name is David than you being a female. In fact, it is also more likely that your name is Steve or Stephen.
There are eight Davids in the FTSE100 CEO list and seven Steves or Stephens, but just six females in the 2016 cohort (one more than in last year’s).
Males are likely to earn 77% more on average than their female counterparts. Male CEOs in the FTSE100 earned on average £4.7 million last year, compared with £2.6 million on average for women.
So, while females make up around 6% of the FTSE100 CEOs, they earn just 4% of the total pay.
There are 148 females on FTSE100 remuneration committees, an 8% rise from last year, possibly in response to such initiatives as the 30% club and the Davies Review for Women on Board. However, nine firms have no women on their remuneration committees.
Despite increasing female representation on remuneration committees, there are still just 30 female executive directors in the FTSE100. Over three-quarters of FTSE100 companies (77) have no female executive directors.
Financial Services represents the most number of companies in the FTSE100, with 23 companies falling into this sector. The pay ratios for companies in this sector are, in most cases, lower than the average pay ratio for FTSE companies (129:1) due to the relatively high average staff pay in this sector.
We all look forward to seeing the Government’s responsible business reforms when they come out later this year.