The efforts of the British government to reduce the remuneration of the CEO have not bowed much.
The median for the payment of executives of the 100 most valuable companies On the London stock exchange rose 11% last year to £3.9 million ($5 million), according to a new report.
This is equivalent to an average increase of only 2% for workers who brought the average wage to just under £23,500 ($29,900). The imbalance means that the average employee would have to stay 137 years in the workplace to earn what a typical CEO does in 12 months.
The figures were crowned by the Chartered Institute of Personnel and Development and the High Pay Centre, an economic think tank.
Hard questions about Executive compensation, and the link between fat CEO salary checks and broader inequality trends, are being asked worldwide. The British government was one of the most aggressive in trying to reduce wage inequality.
British companies are now obliged to reveal the gap between the average wage of men and women. The government will force companies to publish and justify the pay gap between Top managers and workers from 2020 onwards.
“In this context, we could have expected compensation committees and shareholders to exert greater downward pressure on the highest remuneration,” the authors of the report. “Our findings strengthen our belief that a more meaningful change in policy and practice is necessary.”
According to the report, the sharp increase in the CEO’s remuneration was due to a strong stock market. The British government announced earlier this year that it would investigate whether companies are buying back shares to artificially inflate Executive compensation.
“While most companies are doing their responsible business practices right, we understand the wrath of employees and shareholders when paying the bosses is out of step with the company’s performance,” said a spokesperson of the UK Department for Business, Energy and Industrial Strategy.
gender pay gap UK pounds
There is a huge pay gap between CEOs and their workers in the UK.
The report also highlighted the high gender inequality in the top echelons of British firms.
According to the report, male managers Account for an average of 110% more than women in the same position. There are only seven FTSE 100 companies managed by women.
In order to reduce inequality, the report’s authors suggest that leading UK companies immediately begin to disclose wage differentials between workers and managers, rather than wait for the rules to enter into force.
They also recommend that companies provide clearer information on remuneration structures and called on HR managers to put more pressure on the remuneration committees that determine the remuneration of executives.
There was a sign of change on Wednesday.
The Financial Times newspaper, which was purchased by Japan’s Nikkei in 2015, confirms that CEO John Riding would return over £280,000 ($356,000) of his 2017 compensation after his salary package came under scrutiny.
The money will be used for a women’s development Fund and used to reduce the gender pay gap in the company, according to a memo to staff by CNN from the Financial Times.