After 5pm today your boss will have made more money than you earn in a year

Racial pay gap concepts. Pile of coins and miniature people.
FTSE 100 bosses need only to work until 5pm on Monday to pocket the average worker’s annual salary (Picture: Getty Images/iStockphoto)

Chief executives of the UK’s leading firms earn 117 times the annual salary of their average employee, according to research.

FTSE 100 bosses only need to work until 5pm today to make the same amount as the typical worker will for the whole year.

The Chartered Institute of Personnel Development (CIPD) and High Pay Centre think tank said the average executive took home £3.46 million in 2018 – equivalent to £901.30 per hour.

In contrast the average full-time worker earned an annual salary of £29,559, which amounts to £14.37 an hour.

Business Secretary Andrea Leadsom said the pay gap was ‘concerning’.

Frances O’Grady, TUC General Secretary, added that the report ‘tells you everything about how unfair our economy is’.

LONDON, UNITED KINGDOM - DECEMBER 22: A view of the roof structure designed by architect Norman Foster that sits above Canary Wharf Crossrail station, in the North Dock of the Canary Wharf financial district on the Isle of Dogs, December 22, 2019 in London, England. (Photo by Jim Dyson/Getty Images)
The average executive earns the quivalent of just over £900 per hour, compared to employees who earn roughly £14 per hour (Picture: Getty Images)

The report said high pay will be a key issue in 2020.

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This year is set to be the first in which publicly listed firms with more than 250 UK employees must disclose the ratio between chief executive pay and that of their average workers, and explain the reasons for their executive pay ratios.

Peter Cheese, chief executive at the CIPD, said pay ratio reporting ‘will rightly increase scrutiny on pay and reward practices’, but added it was ‘just the start’.

He said: ‘We need businesses to step up and justify very high levels of pay for top executives, particularly in relation to how the rest of the workforce is being rewarded.’

Luke Hildyard, director of the High Pay Centre, said the gap was ‘helping to make the UK one of the most unequal countries in Europe’.

He added that the new reporting requirements would hopefully ‘lead to a more sensible balance between those at the top and everyone else’.

A commuter crosses Tower Bridge in view of skyscrapers in the Canary Wharf business, financial and shopping district in London, U.K., on Thursday, Dec. 5, 2019. London??Mayor??Sadiq Khan??isn't impressed with comments made by??Uber Technologies Inc.??in the wake of its recent ban in the city. Photographer: Simon Dawson/Bloomberg via Getty Images
Business Secretary Andrea Leadsom said the pay gap was ‘concerning’ (Picture: Bloomberg via Getty Images)

Ms Leadsom said the figures ‘will be eye-watering for the vast majority of hard-working people’.

She added: ‘The numbers are better than they were – down a quarter since 2012 and 13 per cent on average since last year.

‘But the situation is still concerning, especially in those cases where executives have been rewarded despite failing their employees and customers.’

The MP said changes to pay ratio reporting would ‘increase transparency around how directors meet their responsibilities’.

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Tim Roache, GMB General Secretary, said: ‘It should be a source of national shame that in just a handful of days, company fat cats will have made more money than the typical UK full-time worker will earn in the entire year.’

But the director general at the Institute of Economic Affairs, Mark Littlewood, said comparing CEO salaries to the average worker’s ‘serves to stoke public hostility, and misleads workers to believe that cuts at the top end will directly translate to top-ups at the bottom’.

He added: ‘In today’s globalised economy, the role of the chief executive has become significantly more important; the successes, failures and sudden departures of CEOs can increase or diminish a company’s worth by billions of pounds – which can also result in the gain or loss of thousands of jobs.

‘By continuing our obsession with high pay, we dismiss the achievements of successful CEOs which benefit employees and customers alike; and we distract ourselves from tackling the critical issue of low pay and the cost of living crisis.’

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