Last reviewed 6 January 2021

Bosses of some leading British companies will have made more money by teatime on 6 January than their average worker earns in an entire year, analysis of CEO pay disclosures in companies’ annual reports reveals.

The research, carried out by the High Pay Centre, has led to it naming 6 January as High Pay Day.

However, it reports a slight levelling off in 2021 as CEO pay levels remained essentially flat, while pay for UK workers had increased slightly. This meant that FTSE 100 bosses had to work 34 hours this year, to surpass median earnings, rather than just 33 hours in 2020.

“Pay for top CEOs today is about 120 times that of the typical UK worker,” High Pay Centre director Luke Hildyard said. “Estimates suggest it was around 50 times at the turn of the millennium or 20 times in the early 1980s.”

Factors such as the increasing role played by the finance industry in the economy, the outsourcing of low-paid work and the decline of trade union membership have, he suggests, widened the gaps between those at the top and everybody else over recent decades.

The Centre argues that the figures should prompt debate about the effects that high levels of inequality can have on social cohesion, crime, and public health and wellbeing.

They will, it goes on, certainly raise concern about the governance of big businesses and whether major employers are distributing pay in a way that rewards the contribution of different workers fairly.

TUC General Secretary Frances O’Grady said: “We must make the economy fair. If the Government is serious about levelling up Britain, it needs to start by levelling up pay and conditions for those we most rely on, and stop the threat to freeze key workers’ pay”.

Ministers must, she went on, bring forward the long-awaited Employment Bill to end exploitative working practices such as zero hours contracts.

Comment by Paul Holcroft, Managing Director at Croner

The coronavirus has resulted in millions of pay cuts and/or redundancies, and it may just be that as the country moves past the impact of the virus, employers take priority in reviewing the pay packets on offer for less senior roles — both to retain current staff and to attract the right type of candidates into emerging post-pandemic roles.