Average salary for CEOs hits £5.5m as pay gap widens

FTSE 100 chief executives have seen their pay grow by 10% to further widen the gap between bosses and workers, according to a think-tank.

The High Pay Centre found that the average pay for a FTSE 100 chief executive was £5.5m in 2015, up 10% from the previous year.

The average pay ratio between a chief executive and the average wage of their employees was 140 to one. The pay ratio between the average total pay of their employees in 2015 was 129 to one.

The median FTSE 100 chief executive pay was £3.9m in 2015 a slight increase from £3.8m in 2014. The slow growth in media pay suggested that the average pay increase was driven largely by big pay increases for only a small number of bosses at the top.

Advertising giant WPP’s Sir Martin Sorrell was the best paid chief executive in 2015 with £70.4m, up from £43m in 2014.

Sorrel was significantly ahead of Berkeley chief executive Tony Pidgeley in second place with £23.2m and Reckitt Benckiser chief executive Rakesh Kapoor with £23.1m in third place.

There were no women among the top ten best paid chief executives in the last two years. About 10% of FTSE100 companies had no female directors and no female remuneration committee members.

High Pay Centre director Stefan Stern, said: “There is apparently no end yet in sight to the rise and rise of FTSE 100 CEO pay packages. In spite of the occasional flurry from more active shareholders, boards continue to award ever larger amounts of pay to their most senior executives.”

In her maiden speech as prime minister on 18 July, Theresa May vowed to tackle the growing pay gap between employers and employees.

“There is an irrational, unhealthy and growing gap between what these companies pay their workers and what they pay their bosses.”

Stern said that the think-tank supported May’s proposals to deal with the pay gap. May proposed that companies should publish the ratio between the pay of the chief executive and the average worker and that there should be representatives of workers on the company's board.

Stern added: “Businesses could save themselves a lot of grief, and do something to restore their reputations, if they listened to workers first before awarding these bumper pay packages. The question the outside world keeps asking is ‘How much?!’. How much better to try and answer that question internally first with concerned yet supportive employees?”

The think-tank said only one company on the FTSE 100 had an employee representative on the board. Travel firm TUI, which merged with German incorporated TUI AG recently, has an airline pilot and travel agent on its supervisory board.

In Germany, workers at companies with over 2000 staff have the right to employee representation, with up to half the seats on the board eligible to be held by them.

The think-tank also reported that only 25% of FTSE 100 companies are accredited by the living wage foundation as paying the living wage for UK based staff.