Average employee earns just 14% of CEO salary

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01 Dec 2016

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This week, the government has published proposals which would force companies to reveal the difference in earnings between CEOs and average employees.

On hearing this announcement, Croner Reward, who have been providing pay and benefits information to organisations of all sizes for over 40 years, have highlighted a staggering difference in earnings between the two roles. Croner Reward’s 2016/17 Director’s Rewards and Clerical Rewards reports show that in the UK the average total pay of a Chief Executive is £143,640, compared with the average salary of a UK Clerical worker at £19,689. Clare Parkinson, Business Manager at Croner Reward says: “These figures show that the average clerical employee will earn just 14% of an average CEO salary, and will receive almost none of the typical benefits package some CEOs are entitled to. “Illustrating this, the normal holiday entitlement of a clerical and operative employee is 25 days. While holiday entitlement for CEOs is generally the same at 25 days, the report found that around 75% of organisations gave additional non-service related holidays to their CEOs, above the statutory minimum.” Croner’s reports also reveal that 89% of companies were found to offer their CEO a company car, with the clerical and operative report focusing more on mileage allowance for their employees, averaging around 40p per mile. On average, CEOs were found to be typically contracted to 35 hours of work per week, but actual hours were closer to 45 – 50 hours. In comparison, an average clerical and operative worker’s standard hours were between 37 and 40 hours. The government’s proposals were published on Tuesday 29 November under the reign of Prime Minister Theresa May, who promised to tackle corporate greed when she came into power in July. The government’s proposals include:
  • Forcing companies to publish pay ratios that show the difference in earnings between the Chief Executive and an average employee
  • Improving the effectiveness of remuneration committees and the extent to which they must consult shareholders and the wider company on pay
  • Introducing binding votes on executive pay packages
The green paper follows Mrs May’s rejection of claims that she had ‘watered down’ plans for workers to have a say in how their companies are run. May also recently ruled out imposing the appointment of employees to company boards at her talk to the CBI.

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