London — The CEOs of the UK’s largest companies saw their compensation jump 23% on average between 2016 and 2017, according to a new study that highlights the widening income gap with rank-and-file workers in the country.
The mean pay for the heads of the FTSE 100 companies climbed to £5.66m in 2017, from £4.58m a year earlier, the annual analysis from the nonprofit human resources organisation CIPD and the High Pay Centre think-tank showed.
Those figures were exacerbated by payouts to Persimmon CEO Jeff Fairburn, whose compensation soared 22-fold to £47.1m, and to Melrose Industries’ Simon Peckham, who raked in £42.8m, a whopping 43 times his 2016 pay.
The figures — which include base salaries, bonuses and other incentive payouts — show that top executives are back to making about 145 times the average pay of their employees despite calls by Prime Minister Theresa May to check executive greed.
Her administration plans to make publication of pay ratios mandatory and has toyed with annual binding votes by investors on remuneration reports and a ban on the award of complex share-based pay programmes.
"Despite increased investor activism and the planned introduction of pay-ratio reporting, the evidence suggests that very little is changing when it comes to top pay in the UK," Peter Cheese, CIPD CEO, said in the statement. "Pressure is building in the system," he warned.
The UK figures are still a far cry from their US counterparts. CEOs of S&P 500 companies took home an average $20.9m in 2017, including salaries, bonuses and payouts of equity awards that vested or were exercised, up about 24% from the prior year, according to data compiled by Bloomberg.
Take-home compensation — measuring what an executive actually pockets in a year from salary, bonuses and payouts of awards from prior years — can vary drastically year over year.
Bosses get the bulk of their big payouts from equity-based incentive programmes, from which payouts often come in uneven increments.
They can also choose when they want to cash in certain awards, such as options.
Persimmon, which builds affordable housing in the UK, in February agreed to reduce payouts from a long-term incentive plan put into place in 2012 after it triggered public furore and led to the resignation of chair Nicholas Wrigley in December.
Melrose, fresh from its hostile takeover of British engineer GKN, pledged in May to review the pay packages of its top executives amid criticism from a shareholder advisory firm. Investors will be consulted over the next few months on a new pay deal taking effect from 2020, it said at that time.