FTSE 100 firms' average CEO pay hits £3.6m

FTSE 100 A man walks near the City of London financial district amid the spread of the coronavirus disease (COVID-19), in London, Britain, January 20, 2022.  REUTERS/Peter Nicholls
FTSE 100: Overall pay for CEOs of top British companies has recovered to pre-pandemic levels. Photo: Peter Nicholls/Reuters

Pay for FTSE 100 bosses has recovered to pre-pandemic levels, with the average CEO taking home £3.6m ($4.5m) despite the ongoing cost of living crisis.

The median average of £3.6m is similar to 2018 levels and sees pay for bosses near the record highs of £4m, recorded in 2017, according to Deloitte’s 2022 AGM-season report.

CEO wages fell over the pandemic, when company boards applied pay restraint. In 2020, chief executive pay stood at an average of £2.8m.

Read more: Pay gap widens as bosses earn 63 times more than their employees

The figures, first reported by the FT, also found a growing disparity between the average employee’s pay and that of the chief executive.

Deloitte found that the median employee to FTSE 100 chief executive pay ratio was 1:81, compared with 1:59 in 2020 and 1:75 in 2019.

Much of the increase in chief executive pay may have come from payouts, which are often linked to share prices.

The FTSE 100 climbed more than 14% in 2021, helping take median annual bonus payouts to 89% of the maximum possible awards, the highest level for more than five years.

The extent of the pay rises across the FTSE 100 was such that Deloitte found a fifth of companies used so-called negative discretion to reduce agreed increases for their bosses.

Deloitte’s report includes data for 95 companies with financial years ending on or after 1 March 2021.

Read more: UK workers suffer sharpest fall in living standards since 2013 as real pay falls

The gap between the pay of company executives and other workers is set to widen this year after falling during the height of the COVID pandemic.

The High Pay Centre said cuts to executive pay led to a fall in the median pay gap between bosses in FTSE 350 firms and employees last year.

Pay ratios were widest in retail and lowest in media and financial services as Unions called for maximum pay ratios to "bring some fairness back" to the system.

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