Bosses in Britain’s top companies will have earned more this year by the end of “Fat Cat Tuesday” than the average UK worker will throughout all of 2016, a think-tank said.
The High Pay Centre (HPC) said chief executives of firms on the London Stock Exchange (Other OTC: LDNXF
) ‘s FTSE 100 index would bypass the average British salary on Tuesday, the second day back at work after the New Year.
They will have earned more than the UK average annual salary of £27,645 ($40,690, 37,565 euros) by late Tuesday afternoon, said the group, which monitors pay at the top of the income scale in Britain.
“Fat Cat Tuesday again highlights the continuing problem of the unfair pay gap in the UK,” said HPC director Stefan Stern.
“Over-payment at the top is fuelling distrust of business, at a time when business needs to demonstrate that it is part of the solution to harsh times and squeezed incomes, and is promoting a recovery in which all employees can benefit.”
FTSE 100 chief executives were paid an average £4.96 million a year in 2014, and the HPC found that even if they are assumed to work long hours with few holidays, this is equivalent to hourly pay of more than £1,200.
The British government has brought in laws to curb executive pay and bonuses since the financial crisis. Shareholders now have a binding veto over executive pay policy.
Since 2013, big companies have also been obliged to be more transparent about the earnings of their bosses, who generally receive a base salary, bonuses, stock options and other compensation.
But the think-tank said the figures would raise questions about the success of government attempts to curb top pay.
The centre called for further measures, such as representation for workers on company remuneration committees that set executive pay, and publication of the pay gap between the highest and median earner within a firm.
Seema Malhotra, junior finance spokeswoman for the opposition Labour Party, called the widening pay gap “shocking”.
“There is growing public concern about rising inequality and its impact on our social fabric. Such a gap cannot be right for Britain or for our long-term economic stability,” she said.
Frances O’Grady, general secretary of the Trades Union Congress, a federation of British trade unions, said: “Every worker deserves a fair share of the wealth they help create.
“The government must start making the right choices to deliver a fair economy with fair pay, like giving workers more collective pay bargaining rights”