Bosses at FTSE 100 firms will earn more than the average salary of their employees in the first three working days of the year, new research has found.
Chief executives will need to work until just before 5pm today to make the same amount of money that the typical full-time worker will earn throughout the entire year.
High executive pay is likely to be a key issue in 2020 as this is the first year that publicly listed firms with more than 250 UK employees must disclose the ratio between CEO pay and the pay of their average worker.
Under new regulations listed businesses must also explain the reasons for their executive pay ratios.
Figures show that top bosses earn 117 times the annual pay of the average employee, while in 2018 (the latest year for which figures are available) the average FTSE 100 CEO earned £3.46 million, equivalent to £901.30 an hour.
In comparison, the median full-time worker took home an annual salary of £29,559 last year, equivalent to £14.37 an hour.
The calculations are based on data and analysis by the CIPD, the professional body for HR and people development, and independent think tank the High Pay Centre.
'Businesses need to justify pay'
The two organisations are now urging businesses to use pay ratio publication as an opportunity to fully explain CEO salary levels rather than to treat it as a “box ticking” exercise, adding that the ongoing issue of excessive high pay “undermines trust in business and fuels concerns over fairness”.
CIPD chief executive Peter Cheese said: “Pay ratio reporting will rightly increase scrutiny on pay and reward practices, but reporting the numbers is just the start. 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.
“Greater fairness and openness in pay is essential in building trust, amongst employees as well as external stakeholders and investors.
“Expectations on businesses behaving and acting responsibly are rising, and greater transparency around how they are treating and managing all their people is a vital part of building long-term sustainability.”
In December Denise Coates, founder and chief executive of gambling giant Bet365, hit the headlines after maintaining her position as Britain’s highest paid boss.
Coates took home a basic salary of almost £277m in the year ended March 2019, pocketing a £57 million basic pay rise.
Luke Hildyard, director of the High Pay Centre, said: “CEOs are paid extraordinarily highly compared to the wider workforce, helping to make the UK one of the most unequal countries in Europe.
“New reporting requirements mean that publicly listed firms will have to be more transparent over how and why they reward their CEOs relative to the wider workforce.”