Report: FTSE 100 CEO pay during 2019 and during the pandemic
The Chartered Institute of Personnel and Development (CIPD) in conjunction with the High Pay Centre has published its annual high pay report which sheds light on CEO remuneration, and the impact COVID-19 and the economic crisis has so far had on CEO pay, between 2019 to 2020.
- The highest paid FTSE 100 CEO received a total pay package of £58.73 million. This is 1,935 times the median salary of a full-time UK worker.
- Six firms paid their CEOs more than £10 million in total.
- For the financial year ending 2019, FTSE 100 CEOs took home a median pay package worth £3.61m, which is 119 times greater than the median earnings of a UK full-time worker (£30,353).
- 70 companies disclosed the pay ratio between their CEO and the median pay of their UK employees. The highest quoted pay ratio was 2,605:1 and the lowest was 15:1. The median was 84:1
- The median pension contribution (or equivalent) given to a CEO is £189,000, representing 24% of their median salary. In comparison, pension contributions for employees represents 7.2% of their salary.
The report calls on a number of changes including:
- Giving the workforce the opportunity to feed into the CEO pay process, such as through an employee representative on the RemCo or an employee opinion survey, etc.
- Companies should ensure CEO reward packages are simpler and linked to fewer – but more meaningful – measures of performance.
- RemCos should ensure that the benefits CEOs and other senior executives enjoy are fair in relationship to what the rest of the workforce receive, such as health benefits and pension contributions.
- In 2021, when all FTSE 100 firms are due to publish their CEO pay ratio data, they should demonstrate to their employees, customers and investors the steps they’re taking to ensure that pay processes and outcomes are fair and affordable.
- The UK Corporate Governance Code should be amended to require publicly limited companies to report on the ethnicity of their senior management teams and their direct reports.