FTSE bosses’ pay gap with staff has narrowed during the pandemic Business

The pay gap between FTSE bosses and the rest of the workforce has narrowed during the pandemic after Covid put an end to executive rewards.

Pressure on workers forced companies to limit – or cancel – their high-profile bonuses last year due to “huge pay inequalities” caused by the crisis.

However, the High Pay Centre, which campaigns for lower city premiums, said it fears the gap will widen already this year.

The group’s analysis found that the average pay ratio between bosses and workers on the FTSE 350 fell to 44:1 between 2020/21, from 53:1 the previous year.

However, the 69 companies that reported their pay ratios in the first quarter of 2022 revealed an increase to 63:1, nearly double the 34:1 ratio these companies had reported a year earlier.

Luke Hildyard, director of the High Pay Centre, said employers need to balance their pay so that middle and low income earners are paid more fairly given the “dark outlook for the UK economy”.

“Our report indicates that companies and their stakeholders have shown some sensitivity to the need to treat workers fairly and reduce vast wage inequalities during the pandemic,” he added.

“However, as the Covid emergency hopefully wanes, it would be a shame if the spirit of solidarity it generated also fades.”

The High Pay Center has asked investors to have binding votes on director compensation reports and to create governance bodies that will oversee pay going forward.

Mubin Haq, chief executive of the Abrn Financial Fairness Trust, said: “The significant drop in earnings ratios during the pandemic shows that change is possible.

“As inflation begins to bite, it is more important than ever that businesses do the right thing and that wages are distributed fairly.

“Going back to the past practice, where pay ratios are increasing year on year, is an area where we don’t want to see a return to normal after the pandemic.”