The latest research from the High Pay Centre reveals that the average top executive of Britain’s largest companies now earns 130 times more than the typical worker, marking an increase from 124 times the previous year. This widening gap has reached an eight-year high. The median average annual pay and benefits for a CEO of a FTSE 100 company have surged to just over £5 million, showing an 8.6% rise from £4.66 million in 2024/25.
Andrew Speke, the interim director at the High Pay Centre, expressed concern over the significant growth in the disparity between executive and worker compensation. He emphasized the urgent need for action to address the rising trend of executive pay outpacing worker pay for the fourth consecutive year.
Addressing the new Prime Minister, Andy Burnham, Speke called for a renewed focus on economic fairness to combat escalating economic inequality and excessive corporate compensation. Failure to tackle this disproportionate wealth distribution, he warned, could further erode trust in the current economic system and fuel the rise of right-wing populism.
The research highlights that 66 FTSE 100 companies raised their chief executive’s pay packages in the past year, with an average increase of 8.6%. This jump in executive compensation far surpasses the 3.6% growth in pay for the typical UK employee. Companies defend these high salaries and perks as necessary to attract top talent and remain competitive internationally.
The High Pay Centre proposes a “fat cat tax” to address excessive executive pay, suggesting a corporation tax surcharge on firms’ profits if a boss’s total compensation exceeds a specified multiple of the median UK worker’s salary. This tax could generate funds for education and early years provision, contributing to reducing income inequality at its roots.
Furthermore, the Centre advocates for broader reforms to enhance employee representation in corporate decision-making, such as including workers on company boards. It also calls for increased transparency in companies’ annual reports regarding pay structures and the number of employees earning below a living wage.