The gap between executive pay and the earnings of average members of staff narrowed slightly during the Covid-19 (Coronavirus) crisis, according to the High Pay Centre.
The think tank’s analysis of FTSE 350 employers found that between 2020 and 2021, the average chief executive officer (CEO) earned £44 for every £1 earned by the average employee, down from a ratio of 51:1 the previous year.
The median CEO and median employee pay ratio across the FTSE 350 was 44:1, down from 53:1 the previous year. The FTSE 350 median CEO and lower quartile employee pay ratio also decreased this year, to 59:1 compared with 71:1. These ratios were higher for the FTSE 100, where the median CEO and median employee ratio was 67:1 and the median CEO and lower quartile employee ratio was 93:1.
So far this year, the 69 businesses that have already reported their data for the first quarter of 2022 had a median pay ratio of 63:1, almost twice the 34:1 ratio that the same firms had the year before.
This year, there were 28 FTSE 350 organisations, 14% of the total, with a CEO and median employee ratio of more than 100:1, whereas last year there were 43.
Luke Hildyard, executive director of the High Pay Centre, said that the data highlighted that employers and their stakeholders showed sensitivity to the needs of their employees during the pandemic by reducing pay inequalities.
He added: “Major employers have a key role to play balancing their pay awards so that high, middle and low earners are all paid fairly and proportionately. As the Covid-19 emergency hopefully reduces, it would be a shame if the spirit of solidarity it generated fades away as well.”
The report recommended that employers should directly provide information on pay ratios to their workers, as well as more granular information on the earnings of those between the upper quartile threshold and the CEO.