The gap between the pay of bosses and employees will widen again this year after narrowing during the pandemic, research suggests.
FTSE 350 chief executives are expected to collect 63 times the average median pay of workers at their companies , according to the High Pay Centre thinktank, which campaigns for fairer pay structures.
The ratio between the pay collected by boss and workers had fallen to 34:1 in 2021 after widespread cuts to executive pay during the pandemic. However, the thinktank said early examinations of recent data indicated that the pay gaps would widen again in 2022.
“Our report indicates that companies and their stakeholders showed some sensitivity to the need to treat workers fairly and reduce vast pay inequalities during the pandemic,” Luke Hildyard, executive director of the High Pay Centre, said. “However, as the Covid-19 emergency hopefully reduces, it would be a shame if the spirit of solidarity it generated fades away as well.
“With the dire outlook for the UK economy, how we share existing resources will become increasingly important.”
The analysis found pay ratios were widest in the retail industry and lowest in media and financial services.
Mubin Haq, the chief executive of the abrdn Financial Fairness Trust, which helped with the research, said: “The significant fall in pay ratios during the pandemic shows change is possible. As inflation starts to bite, it’s more important than ever that companies do the right thing and pay is distributed fairly.
“Going back to past practice, where pay ratios increase year-on-year, is one area where we do not want to see a return to normal following the pandemic. However, this increasingly seems unlikely as evidence from a number of companies shows pay at the top rebounding.
“Wage growth for those on lower incomes will be critical to ensuring millions can weather the cost of living crisis we are now facing.”
Frances O’Grady, the TUC general secretary, said: “Pay inequality has gone much too far. Even for the best-performing executives, pay can be out of all proportion compared to hard-working staff on the frontline.
“It’s time we had maximum pay ratios to bring some fairness back. We need an emergency budget to help families with the cost of living crisis, and it would be a great opportunity to announce plans for this too.”
A total of 43 bosses of FTSE 350 companies received more than 100 times as much as employees’ average salary in 2020 according to the High Pay Centre’s research.