AstraZeneca CEO Pascal Soriot earned 86 times more than a key worker during the pandemic

The annual pay of FTSE 100 chief executives still equates to more than what a UK worker would earn in a lifetime, despite the rate falling during the pandemic.

Research by think tank High Pay Centre found the median FTSE 100 CEO was paid £2.69 million in 2020, 86 times the median full-time worker in the UK.

Pascal Soriot of AstraZeneca was the highest earning CEO, making £15.45 million last year.

Luke Hildyard, director at the High Pay Centre, said very high CEO pay reflects a wider gap between rich and poor in the UK than in most other European countries.

He said: “The inequalities exposed by the pandemic and the volume of public money used to protect large businesses could strengthen the argument for measures to contain top pay and rebalance extreme income differences.”

Pay during the pandemic:

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Post-pandemic pay cuts on the horizon, bosses warn

Across nine companies using public money throughout the furlough scheme to pay their employees, the average CEO pay for the period was £2.39 million.

The GMB union said the average FTSE 100 chief executive pay of £2.69 million was as much as a key worker could expect to earn in their lifetime.

“The pandemic has highlighted the massive inequalities that exist in our society,” said Gary Smith, the GMB general secretary.

“If this government is serious about a levelling up agenda, ministers must make sure our NHS and local government workers get a proper pay rise, while legislating to close the obscene pay gap in the private sector.”

Kate Palmer, HR advice director at Peninsula, said these findings were likely to make employees question their own pay packet and value to the company.

She told HR magazine: “Pay disparities can lead to grievances and a reduction in engagement, which could damage productivity.

“Having a clear pay structure, equal and open to all, will help HR to demonstrate that their organisation is doing the best for all its staff.”

Palmer advised HR teams to be open and transparent about the work being done, especially from the top, will also help employees to see the value of their work.

Martin Tiplady, CEO of Chameleon People Solutions, said while some CEO’s salaries are outrageously high, the pay of some low-end workers is equally low.

He told HR magazine: “These are apples and pears in terms of comparison. Some always comment on high public sector salaries by way of comparing with the prime minister package, which is an equally spurious comparison.

“The important thing is that pay is reasonable, relevant to the marketplace and can be justified and is properly accountable.”

Though it is difficult to know how to justify a multi-million salary, Tiplady said it is a problem with the way the job market works in the UK and unfortunately he believes there is little HR can do to change this.

“It is up to the leadership, not HR, to justify decisions about pay. HR should be familiar with the basis of decisions and be able to communicate them, but the leadership needs to step up to the plate and defend their decisions themselves.

“HR has a major role in the communications of pay, for it sets some of the culture, but the messaging starts above them.”