UK CEO pay hits record high, still trails U.S. counterparts
LONDON, UNITED KINGDOM — British executives saw record compensation in 2023, but the pay gap with their American counterparts continues to widen.
A new report by the High Pay Centre reveals that median pay for FTSE 100 CEOs rose to £4.19 million ($5.4 million) last year, a 2% increase from 2022.
Top earners in the FTSE 100
AstraZeneca’s Pascal Soriot topped the list of FTSE 100 earners, receiving £16.85 million ($21.7 million) in 2023.
Other high earners included Relx CEO Erik Engstrom and Rolls-Royce chief Tufan Erginbilgic, both earning around £13.6 million ($17.5 million).
“This may reflect an emerging trend where the largest FTSE 100 companies follow the lead U.S. counterparts in paying their CEOs ever higher amounts, while smaller FTSE 100 companies continue to pay comparatively ‘modest’ sums,” the report said.
Debate over UK CEO compensation levels
The future of CEO compensation in the UK remains uncertain as stakeholders continue to debate whether current pay levels are adequate or excessive.
The High Pay Centre’s report highlights that the gap between the pay of top executives and average employees is now 120 times, a figure that has raised concerns about income inequality.
Advocates for higher CEO pay argue that without competitive compensation, the UK risks losing talent to other markets, particularly the U.S.
For instance, while Shell CEO Wael Sawan earned £7.9 million ($10.2 million) in 2023, his U.S. counterpart at Exxon Mobil, Darren Woods, took home $37 million.
This growing gap is largely driven by the U.S.’s preference for compensation through stock awards, which are closely tied to company performance.
However, others warn that excessive CEO pay could exacerbate tensions between management and the wider workforce, especially in a time of economic uncertainty.
CEO pay vs. average worker compensation
The divide between CEO and worker pay continues to widen, with top executives raking in massive compensation packages while employees struggle with high inflation.
According to a recent analysis by Equilar and The Associated Press, the median CEO in the S&P 500 was paid a staggering 196 times more than the median employee in 2023, up from a ratio of 185 the previous year.
