By Lars Mucklejohn
Bosses of FTSE 350 firms are paid 57 times more than their employees on average, according to new data, as City grandees argue over the best way to attract top talent to London.
Figures from the High Pay Centre showed the average ratio of chief executive pay to employee salary was 57:1 last year, up from 56:1 in 2021.
The pay gap in the FTSE 100 is even more dramatic at 80:1, albeit a drop from 83:1 in 2021.
These ratios are now firmly back to pre-pandemic levels, having narrowed slightly during the Covid-19 crisis as some bosses voluntarily took pay cuts.
Square Mile grandees have argued that bosses’ pay is still too low to draw in the top talent London needs amid a dearth of new listings.
An increasing number of firms are also leaving London for more attractive markets in the US.
London Stock Exchange boss Julia Hoggett argued in May that attracting talent was “hampered by the advice and analysis of the proxy agencies and some asset managers voting against executive pay policies even when those pay levels are significantly below global benchmarks”.
Andrew Griffith also backed a reappraisal of executive pay in order to tempt top talent to the UK when he was City minister earlier this year.
However, others have said that pay rises for CEOs are not justified amid the cost of living crisis.
“At a time when food and energy bills are sky-high there is simply no justification for such huge pay inequality,” said Paul Nowak, general secretary of the Trades Union Congress.
High Pay Centre director Luke Hildyard added: “We need a fairer, more equal, more inclusive economy where companies create lots of well-paid jobs for all their workers, rather than a handful of obscenely paid roles for those at the top.”
The Sunday Times first reported today that asset management giant Legal & General Investment Management has updated its policies to say would approve US-style bonuses if companies could justify them.
Today’s figures are dwarfed by their US counterparts.
Chief executives in the S&P 500 made $16.7m on average last year, according to union group AFL, with a ratio of 272:1.
Meanwhile, the High Pay Centre said in August that the median pay for a FTSE 100 boss was £3.9m in 2022.
