Today’s the day that top bosses will have earnt more than an average worker will earn in a whole year. Here, Jennifer Pinder from our Employment team, discusses what the headlines have branded 'Fat Cat Thursday'.
Despite the average earnings of top executives falling in recent years, they still earn around 120 times more than an average worker.
Some people view this salary gap as evidence of significant inequality within business. But, others argue it’s appropriate that the individuals making the decisions that impact all their workers are properly remunerated.
Whatever your view, the government has set out to try and narrow this gap, in much the same way that the gender pay gap is being tackled. Around 900 listed companies will be required to publish - and justify - the pay ratio between chief executives and their average worker this year.
Many businesses will also have to provide their first gender pay gap reports. Both reports are part of the government’s drive to make businesses more transparent.
Whether or not these new reporting obligations do anything to improve the executive and/or gender pay gaps, they’ll almost certainly result in PR headaches for big businesses.
If you’d like to discuss your businesses reporting requirements, please get in touch with a member of our employment team.
If you earn an average UK salary, by the end of today a top boss will have earned more than you do all year. In fact, it takes a top chief executive just three days to earn £28,758. The day has been declared "Fat Cat Thursday" by think tank the High Pay Centre and HR industry body the CIPD, which calculated the figure. The gap between executive pay and the rest of the workforce remains huge despite top bosses' pay dropping by a fifth last year. The average boss of one of the UK's largest 100 listed firms earned £4.5m last year, down from £5.4m the year before.