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Seven in 10 say UK CEO pay 'too high'

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More than half (55%) of employees claim high levels of CEO pay is bad for firms’ reputations

Seven in 10 (71%) employees believe CEO pay in the UK is ‘too’ or ‘far too’ high, according to research from the CIPD.

Employee survey The view from below: What employees really think about their CEO’s pay packet found that 45% believed their own CEO’s pay is too high, and only a third (32%) agreed their CEO is rewarded in line with their organisation’s performance, with 38% saying they disagreed and 29% saying they don’t know.

Additionally, more than half (55%) of employees claimed the high level of CEO pay in the UK is bad for firms’ reputations, and six in 10 (59%) said this demotivates them at work.

When asked what could be done to address the issue, the survey found that seven in 10 workers (72%) wish to see greater pay transparency generally, and more than half (53%) want reward information to be published for all levels.

CIPD reward adviser Charles Cotton said that the growing disparity between pay at the high and lower ends of the pay scale is leading to “a real sense of unfairness, which is impacting on employees’ motivation at work".

“The message from staff to CEOs is clear: ‘the more you take, the less we’ll give’,” he said. “At a time when the average employee has seen their salary increase by just a few percentage points over the last several years, we need to take a serious look at the issue of top executive reward."

“It’s crucial that chief executive reward packages are simpler and more clearly aligned to both financial and non-financial performance measures,” Cotton added. “These should include how their leadership impacts on critical outcomes such as employee wellbeing and engagement, accountability for culture and behaviour, and workforce development, all of which are vital underpinnings of the long-term health of both people and business.”

Stefan Stern, director of the High Pay Centre, welcomed the new research, adding that excessive pay packages mark CEOs out “almost as a different species".

“If we are really 'all in this together', the gap between the top and the rest of the workforce should not be so high,” he said. “Outlandish pay sustains the myth that a single, heroic individual is somehow running a big business on his or her own. That's simply untrue. Leadership matters, and good leaders should be well rewarded. But the workforce does the work."