Fat - and not so fat - cats
December 2 2002 - Research released by the Transport and General Workersí Union shows that top employers earn over 600 times more than the lowest paid earners. "An excessive gap which shows that Britainís boardrooms are out of touch with reality on pay" according to Bill Morris, T&G General Secretary.
The study was conducted for the T&G by Labour Research. It shows that the top ten earners in the FTSE 1000 received £63 million between them last year - an average of £6.3 million each. Meanwhile, the bottom ten groups of wage earners had to survive on an average of just over £10,000 per person for the year.
Ten highest earners
Robert H Graham
Sir George Mathewson
British Sky Broadcasting
Royal Bank of Scotland
Bottom ten earners
Women kitchen porters
Women Bar staff
Women check-out operators
Women counter hands, catering assistants
Women press stampers & machine operatives
Male kitchen porters
Commenting on the figures Bill Morris said: "How can the CBI criticise pay demands of the low paid workers when they are earning such extreme figures? It is a sad reflection of our society that bosses seem to think itís acceptable to pay themselves telephone number salaries while paying peanuts to thousands of low paid workers who are left to struggle on a minimum wage."
"The fat cats should try to live on the wages of their staff before they commence wage negotiations - that way we might see a reduction in the gap between the poorest and highest earners in our society."
But the Institute of Directors says that the average pay rise for directors was a mere 3.5% during the last 12 months. Their annual survey covers directors across the full range of companies outside the FTSE 250. It is carried out each year for the IoD by Croner Reward and stands in contrast to other directors' pay surveys which tend to focus exclusively on the top FTSE companies. Croner Reward's survey shows that the average pay increase for directors and director level executives was only a little above inflation and very much in line with the rest of the workforce.
George Cox, Director General of the IoD, said:
"Directors' salaries are always a subject of controversy, particularly when associated with news headlines about 'fat cats'. These stories paint a distorted picture of the truth about directors' earnings, as this report proves."
The survey also found that:
Directors are forecasting pay increases of 3.5% with only 17% expecting an increase of 5% or more.
A wide regional disparity still exists, with directors in London enjoying pay increases of 8% above the average compared to their counterparts in the North East who received 12% below the going rate.
Equally, a gender gap still exists with female directors earning 21% less than their male colleagues. On the plus side this gap is narrowing and the number of female respondents to the survey increases every year.
The average salary of a director of a small company (up to £5m turnover) is £58 000.
Steve Flather, Managing Director of Croner Reward, said:
"This survey analyses the pay of directors within the SME sector. These organisations form the majority of companies in the UK making the survey results more reflective of general business practice. Many of the salaries commonly quoted are for individuals working within the largest companies, often giving the impression that pay levels are generally much higher than is the case."