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Jessica Fino 4 Jan 2017 11:57am

Top bosses make more by lunchtime today than average workers do all year

FTSE 100 bosses will have already earned the average annual UK salary by lunchtime today, according to a new study

The High Pay Centre said top executives will have earned the average median pay of UK workers - £28,200 - by mid-day.

The think tank said that the median pay for a FTSE 100 chief executive in 2015 was £3.973m, meaning they could be paid over £1,000 an hour, even after making the "generous assumption" that the bosses work 12 hours a day, including three out of every four weekends, and take fewer than 10 days holiday per year.

The National Living Wage currently stands at £7.20 an hour.

Stefan Stern, High Pay Centre director, said, “Our new year calculation is not designed to make the return to work harder than it already is. But ‘Fat Cat Wednesday’ is an important reminder of the continuing problem of the unfair pay gap in the UK.

“We hope the government will recognise that further reform to pay practices are needed if this gap is to be closed."

Stern said the government should ensure there is effective representation for ordinary workers on the company remuneration committees that set executive pay, and publish the pay ratio between the highest and average earner within a company. .

Responding to the High Pay Centre study, Frances O’Grady, TUC general secretary said, “Working people deserve a fair share of the wealth they help create. But while the pay of top executives has been rocketing up, the average weekly wage is still worth less than it was nine years ago.

“The prime minister must stick to her promise to tackle excessive pay at the top. And she should keep her commitment to put workers on company boards. This would help keep executive salary decisions grounded in common sense and fairness.”

Investment manager Hermes warned the UK’s larger listed companies in November that their irresponsible attitude to executive pay has alienated the public.

In its paper, Remuneration Principles: Clarifying Expectations, Hermes argued that the prevailing executive pay model is currently deeply flawed.

Meanwhile, a study by Cambridge Judge Business School and King’s College London last year found that new UK disclosure rules have failed to curb chief executive pay or improve the link between pay and performance at FTSE 100 companies.

The study found that many UK companies cherry picked what information to submit by choosing only certain geographies or types of workers.

In April last year, 72.36% of shareholders at Weir Group rejected the company’s director’s pay policy in a shareholder rebellion over excessive executive pay, making it one of the largest rejections of a pay policy since binding votes on bonus plans were introduced by former business secretary Vince Cable in 2013.

In the same month, 59.1% of BP shareholders voted against chief executive Bob Dudley’s £14m pay package. Shareholder advisory group Manifest said this was the fifth largest vote against remuneration in the UK.

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