The High Pay Centre found that the average FTSE 100 CEO's pay climbed to £4.964 million in 2014, and the 10 highest-paid CEOs were paid more than £156 million between them.
Despite this, only a quarter of FTSE 100 companies are Living Wage accredited.
The figures represent a slight increase on average CEO pay from £4.923 million in 2013, and a more pronounced rise from the £4.129 million average in 2010.
High Pay Centre founding director Deborah Hargreaves said: “The coalition government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket. However, it’s clear that these reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.”
She added: “Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives. It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest.”
TUC general secretary Frances O’Grady said that inequality is reaching “stratospheric levels”. “After years of falling living standards it is a disgrace that top executives are taking an even bigger share of the rewards of growth,” she said. “We need a recovery that works for the many and not just the few.”
She called for employees to be included in workplace pay committees to “add some common sense and reality to boardroom pay decisions”. She added: “They should not be a closed shop for an elite who are only interested in looking after their own.”
The High Pay Centre website calculates the pay an average FTSE 100 CEO has earned since 5 January 2015. At the time of press it stands at more than £2.9 million.
