The latest research from the High Pay Centre reveals that the average top executive in Britain’s largest companies now earns 130 times more than a typical worker, marking an increase from 124 times the previous year and hitting an eight-year high. The median annual pay and benefits for a chief executive of a FTSE 100 company have surged to over £5 million, showing an 8.6% rise from £4.66 million in 2024/25.
According to Andrew Speke, the interim director at the High Pay Centre, the widening gap between executive and worker pay should serve as a warning to those overlooking the escalating executive salaries. The study highlights the fourth consecutive year of growth in FTSE 100 executive pay, surpassing the increase in worker pay.
In a message directed towards new Prime Minister Andy Burnham, the High Pay Centre emphasizes the need for a renewed focus on economic fairness to address the growing economic inequality and excessive corporate compensation, which could fuel right-wing populism if left unaddressed.
Despite its extensive efforts in shedding light on exorbitant boardroom pay, the think tank is facing closure due to funding constraints. The data shows that 66 FTSE 100 companies raised their chief executive’s compensation package from the previous year, with an average 8.6% surge surpassing the 3.6% growth for the typical UK employee. Pay-setting committees at major firms argue that high executive remuneration is necessary to attract top talent and remain competitive globally.
The High Pay Centre advocates for a “fat cat tax” proposal, suggesting that corporations should pay a tax surcharge on profits if a boss’s total compensation exceeds a specified multiple of the median UK worker’s salary. This tax could be scaled based on multiples exceeding certain thresholds, with the potential to generate funds for education and inequality-reducing initiatives.
Furthermore, the think tank proposes broader reforms to enhance employee representation at the top levels of companies, including advocating for worker presence on boards and increased transparency in annual pay disclosures. These reforms aim to address the root causes of inequality and promote corporate accountability.