Executives in charge of major companies in the United Kingdom experienced a nearly 16% average increase in their pay during the past year, while the majority of workers faced the challenge of stagnant wages amidst rising costs of living. These findings were presented by the High Pay Centre, an organisation that monitors executive compensation trends. The data revealed that the median salary of a chief executive within the FTSE 100 rose to £3.91 million in 2022 from £3.38 million in 2021.
The report also underscored a stark disparity, indicating that the average earnings of a FTSE 100 CEO were 118 times higher than those of an average UK worker earning £33,000 annually. While critics condemned the excessive compensation, certain companies defended the pay figures, asserting that they were in alignment with industry standards.
According to the High Pay Centre, Sir Pascal Soriot, the head of pharmaceutical giant AstraZeneca, earned the highest salary in 2022, totalling £15.3 million. This British-Swedish company gained significant recognition for its collaboration with Oxford University scientists in developing a Covid-19 vaccine. Following Soriot, Charles Woodburn from the security and aerospace firm BAE Systems ranked as the second-highest earner with £10.7 million. Emma Walmsley, CEO of GlaxoSmithKline, emerged as the highest-earning female executive with £8.45 million. Notably, Ben van Beurden, the former leader of energy conglomerate Shell, garnered £9.7 million, and Bernard Looney of BP secured £10 million, both landing among the top six highest earners. These placements followed both companies reporting record profits driven by surging energy prices.
In its analysis of executive pay for all companies listed on the UK’s FTSE 100 index, the High Pay Centre disclosed a median compensation that surpassed £500,000 compared to the previous year, sustaining an upward trajectory. This trajectory persisted from a low of £2.46 million in 2020, a time when the pandemic was at its peak. The centre attributed this rise partially to the post-lockdown economic recovery and the prevalence of substantial incentive-based rewards linked to profitability and stock prices for executives.
It’s noteworthy, however, that executive earnings still lag behind the peak they reached in 2017 when they averaged £3.97 million. The report emphasised that this past year further deepened the gap between executive pay and the wages of other employees. Responding to these findings, the Trades Union Congress (TUC) characterised the UK as a place of “grotesque extremes.” Paul Nowak, the general secretary of the TUC, conveyed the need for an economic system that prioritises improved living standards for all individuals, rather than concentrating wealth at the upper echelons.