The average CEO in a FTSE 100 organisation received an annual pay package of £4.5 million in 2016, down 17% from the £5.4 million in 2015, according to an analysis by the CIPD and the High Pay Centre. In 2016, the pay ratio between CEOs and the average pay package of their employees was 129:1 and 60 of the 100 CEOs in the listing are paid more than 100 times the typical annual pay of a UK worker (£28,000 at the mean).
Only just over a quarter of the FTSE100 are accredited by the Living Wage Foundation for paying the national living wage to all their UK-based staff.
Peter Cheese, chief executive at the CIPD, said:
‘We have to hope that the reversal in rising executive pay is the beginning of a re-think on how CEOs are rewarded, rather than a short-term reaction to political pressure. The fall in executive pay is a step in the right direction, but it’s still happening within an overall reward system where average wages in the UK have been flat. Our analysis also shows a clear gender pay disparity at the top, with female CEOs receiving less than their male peers. Quite rightly, this issue of fairness is increasingly being called out and this needs to be addressed at all levels of business. Rather than focusing predominantly on share price or short-term profit, we need a much more balanced scorecard for performance that also takes account of other indicators of success such as investment in people, social responsibility and accountability, and long-term value creation.’