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The TUC have today published a report into the pay of FTSE 100 company directors. The report revealed that the UK’s highest paid company director Martin Sorrell of WPP – the world’s largest advertiser – was paid an eye-watering £70 million in 2015 – around 2,500 times the average workers salary, and equating to over £38,000 an hour.
The average earnings (not including pension schemes) of the FTSE 100 company directors has increased by 47% in the five years, and now stands at £3.4 million. This is in stark contrast to the wages of their workers which have stagnated, and in real-terms trail their pre-2008 levels.
In 2010 the average FTSE 100 director was paid 89 times more than the average full-time worker. By 2015 director pay had risen to an astonishing 123 times that over the average wage. It should come as no surprise then that 1.5 million UK families are in serious debt.
Comparisons with minimum wage pay is even more shocking. The average FTSE 100 director is paid an entire full-time minimum wage salary in just one day.
News of five years of austerity, cutbacks and pay restraint, does not appear to have reached the boardroom. So much for being ‘all in it together.’
The TUC General Secretary, Frances O’Grady, said that
While millions of UK families have seen their living standards squeezed, directors pay has reached stratospheric levels. These shocking new figures show why Theresa May must deliver on her promise to put workers on company boards. This would inject a much-needed dose of reality into boardrooms and help put the brakes on the multi-million pay packages that have damaged the reputation of corporate Britain. Other European countries already require workers on boards, so UK firms have nothing to fear.
I agree with O’Grady in her assertion that UK firms have nothing to fear. Putting a small number of workers on company boards is purely a token gesture and will achieve little in the way of putting the brakes on corporate pay, or more importantly, increasing the average pay of workers at the shop-floor level.
A government spokesperson responded to the TUC report by stating that:
There will be a consultation this autumn on measures to tackle corporate irresponsibility, excessive corporate pay and poor corporate governance.
It remains to be seen what measures, if any, a free-market Conservative government would be prepared to recommend or impose that could limit the ability of private organisations to set the own rates of remuneration.