- Average employee is paid £25,816, but the boss gets £3.75m
- Salaries of corporate elite are 'out of control', says commission
A typical FTSE 100 executive enjoys a pay package of £3.75million – 145 times more than their workers receive, a report reveals today.
The High Pay Commission goes on to criticise fat-cat bosses for their ‘out of control’ pay.
The commission’s initial findings warn that income inequality has returned to levels not seen since Victorian England.
The great divide: The High Pay Commission warns that the majority of people are struggling while a tiny percentage enjoys an increasingly lavish lifestyle
As a result, a tiny number of people are enjoying gold-plated pay packages while the majority of the country struggles to make ends meet.
The top 0.1 per cent of earners will see their pay rise to an estimated 14 per cent of total national income by 2030, according to the commission.
Its chairman, Deborah Hargreaves, said: ‘The gap between pay of the general public and the corporate elite is widening rapidly.
‘It is out of control. We have to ask ourselves whether we are paying more and getting less.’
Asked what they think about executive pay, more than 70 per cent of adults told researchers that it makes this country ‘grossly unequal’.
The rich get richer: The top 0.1 per cent of earners can expect to see their pay rise to an estimated 14 per cent of total national income by 2030
The average worker is paid £25,816, but their boss typically gets 145 times more with a £3.75million package.
The pay gap between the bottom and the top of the corporate ladder has widened considerably in the past decade. In 1999, the boss typically earned 69 times their worker’s salary.
By 2007 – the year the credit crunch struck – it peaked at 161 times. Despite the recession and banking crisis, it has narrowed only modestly.
The scale of the pay packages is eye-watering, with most of the winners working in the finance industry.
At Barclays, for example, 231 people scooped a total pay pot, including long-term incentive plans, of £554million. This is an average of £2.4million each. By comparison, a typical nurse is paid around £27,000.
The report comes after Sir Richard Lambert, former director general of the CBI business lobby group, warned bosses of big firms that they risked being ‘treated as aliens’.
He said: ‘It is difficult to persuade the public that profits are no more than the necessary lifeblood of a successful business if they see a small cohort at the top reaping such large rewards.
'If leaders of big companies seem to occupy a different galaxy from the rest of the community, they risk being treated as aliens.’
The High Pay Commission was set up in November to look at pay in the private sector. A final report will be published this autumn.
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