Forty nine minutes after returning to work after the 2013 New Year break Britain’s highest paid director, Simon Peckham, Chief Executive of engineering company Melrose, earned as much as a worker on the living wage earns in a year, according to new TUC research looking at directors’ pay in Britain’s top 350 companies published today (Friday 17th October).
Simon Peckham – Britain’s highest paid director in the financial year ending in April 2013 – received more than £31m (£31,157,399) or £119,836 a day. This is 2,238 times more than a worker on the living wage of £7.65 an hour who worked 35 hours a week.
The top pay research contained in Executive Excess was provided by independent researchers Incomes Data Services. It covers the year ending April 2013 and shows that across the FTSE 100 the average (median) total earnings for the highest paid director was £3,195,353 – 230 times an annual full-time non-London living wage.
It would have taken just over a day for the average director to have earned a year’s worth of the living wage (£7.65 an hour), according to the research.
Companies with high inequality between top pay and that of the rest of their staff perform less well, according to research. But employees and investors do not have access to robust information that would allow them to assess the gap between top directors and staff in the rest of their company. The TUC is calling on the government to compel firms to disclose full information about employee pay.
Only 39 out of 288 companies (14 per cent) asked by the TUC to provide sufficient data to make an accurate calculation of the ratio between director and staff pay even replied to the request. A third of them provided no more information than was in their annual report.
At present companies are only required to publish a figure for the total cost of staff remuneration and the number of staff they employ. But while these totals allow calculation of a figure for average (mean) pay, different companies compile the data in different ways. For example, some include overseas staff based in countries where pay might be higher or lower than the UK. Some companies include contractors and some do not. And a crude mean of this type only reveals what an average staff member earns a year without taking into account whether they work full or part-time.
The published figures show that across the FTSE 100 the average (median) ratio between the total earnings of the highest paid director and mean staff pay was 85.
TUC General Secretary Frances O’Grady said:
“While most are suffering continuing cuts in their living standards despite the recovery, boardroom pay just gets bigger and bigger every year. It is obscene that anyone needs to earn more than 2,000 times the living wage.
“Most companies fail to provide proper information on how much their UK staff earn. The government is complicit in this cover up as ministers refuse to make companies publish the kind of information investors and employees need to work out the gap between boardroom pay and the rest.
“These shocking new figures show that it is those at the top gaining from the recovery, while living standards are still falling for the majority. That is why tens of thousands will be marching tomorrow in the TUC’s Britain Needs a Pay Rise demonstration in London.”