UK News

When public sector workers went on strike over pay, Britain’s top bosses got a hefty pay rise

Executives at some of Britain's biggest companies have seen substantial pay rises over the last year despite the ongoing cost of living crisis.

Yes, with public sector workers striking day after day over cuts in real wages and pushing to keep their wages in line with double-digit inflation, the top executives of Britain's most successful companies were able to take home even more money than usual.

How Much More Are Britain's Top Chefs Earning Now?

According to the independent think tank high wage center – which focuses on economic inequality and fair pay – the average salary of chief executives in the FTSE 100 has risen by an average of almost 16% over the last year.

FTSE 100 is short for Financial Times Stock Exchange 100 Index, a list of the companies with the highest market capitalization on the London Stock Exchange.

And a 16% increase means these people earned more than £500,000 compared to 2021.

The think tank calculated that the average wage of these bosses rose to £3.91m in 2022, compared to £3.38m last year.

That's quite a big increase any way you look at it – especially when you consider that the average salary of a FTSE 100 boss is already 118 times that of a typical UK worker who earns £33,000 a year.

The High Pay Center said the highest-paid person on their list was the boss of pharmaceutical giant (known for launching one of the Covid vaccines), AstraZeneca. Sir Pascal Soriot is reported to have taken home £15.3million last year.

That's not particularly surprising given that both companies announced record profits after energy prices skyrocketed last year and consumers paid more to heat their homes.

The think tank noted executive salaries had fallen at the height of the Covid pandemic, falling to £2.46million. That's after it peaked in 2017 at £3.97million.

The think tank also speculated that there are “strong incentive payments tied to profitability and share prices” for the FTSE 100's top executives.

In response to the report, AstraZeneca said 12% of Sir Pascal's salary is locked in, with the rest contingent on share price and performance.

It also said the CEO's salaries were below those of other major pharmaceutical competitors.

Meanwhile, energy companies claimed the high numbers hurt bonuses, incentives and pension payments, and that their executives were “competitively paid.”

SimpleImages via Getty Images

Why is that important?

Since 2021 workers across the UK have been facing severe financial shortfalls for basic needs such as groceries and electricity due to the cost of living crisis.

Inflation, the rate at which the prices of goods and services in a country increase over a 12-month period, has pushed up consumer prices.

While it was 6.8% in July, it rose significantly through 2022, peaking at 11.1% last October.

Current figures from the Office for National Statistics (ONS) show that regular wages reportedly reached the same level as inflation within three months to June.

However, if inflation is taken into account, this actually corresponds to a decrease of 0.6%.

Even Bank of England Governor Andrew Bailey said so BBC last year that people shouldn't demand big pay rises – even if public sector workers went on strike over wage stagnation.

The government initially raised similar concerns that it could lead to a wage-price spiral, where higher wages meant companies would have to charge consumers more to pass on to employees – exacerbating inflation and a vicious cycle triggered.

Real wages in all UK regions are now lower than in 2010, accounting for inflation, according to a January Labor Party study.

After months of negotiations, the government recently struck a pay deal with some public sectors – but debates over these additional costs stand in stark contrast to the hefty amounts FTSE 100 chiefs are taking home.

Still, Luke Hildyard, director of the High Pay Centre, said: “At a time when so many households are struggling to meet the cost of living, an economic model that offers a half-million-pound pay rise for executives who are already multi-millionaires is paramount is sure to go wrong somewhere.”

However, said Duncan Simpson, managing director of Adam Smith Institute The economic think tank argued that the broader picture is at stake.

He told that BBC: “Business leaders provide value to customers in the products and services they sell, to retirees in dividends from the profits they generate, and to HMRC in tax revenue.”

He claimed: “Shock attacks remain an unhelpful way of looking at the private sector, which employs over 80% of workers in the UK and benefits society as a whole.”

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button