UK Directors earn 120x employees salary | Bradleys Accountants

/ Posted By - Bradleys Accountants / Categories - Accounting for Individuals

Directors in FTSE 100 companies have witnessed a 21% increase in their total pay in just one year, while the average employee is struggling to keep up with inflation.

According to a new report by Incomes Data Services (IDS) – a research group that extracted the data from companies’ annual reports, directors of the top 100 listed UK companies now earn 120 times the average sum earned by their full-time employees.

The research group said the median earnings of a Top 100 listed company director was now £2.4m, while CEOs earned £3.34m – this was credited partly to a large increase in long-term share awards (+44%) and increase in bonuses (+12%). But employee pay rises were much paler in comparison, as they only increased by 2.5%.

The best paid CEOs were in marketing, media and telecommunications while those in distribution and retail got the lowest pay.

Editor of the IDS report, Steve Tatton, said, “FTSE 100 directors have seen their total earnings jump sharply in the last year, fuelled by a rise in the value of share based awards. Bonus payments have also recovered strongly following a downturn last year. “

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    The pattern of pay growth highlights the complex make-up of directors’ remuneration. Salary rises may be modest but this can be more than made up for by the receipt of incentive payments. When such incentives pay out, they can pay out substantial sums, giving a significant boost to directors’ earnings.

    The research comes at a time when the earnings gap between those at the top of the corporate ladder and ordinary employees is being heavily criticised.

    According to Trade Union Congress (TUC), General Secretary, Frances O’Grady who commented yesterday, “Now we know who is benefiting from the recovery, for as sure as anything it is not the great majority of workers who continue to face cuts in their living standards. Every year people ask if this soaraway boardroom greed can continue. It seems that it can. No wonder workers across the health service are taking strike action today. “

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