Highest-paid UK CEO earned nearly 2,000 times average worker salary in 2019

Lucy Harley-McKeown
·3 min read
Ocado's CEO Tim Steiner is the top paid executives in the UK, according to a study. Photo: Getty
Ocado's CEO Tim Steiner is the top paid executives in the UK, according to a study. Photo: Getty

The highest paid FTSE 100 (^FTSE) CEO received a total pay package equivalent to 1,935 times the median salary of a full-time UK worker, new research has shown.

Ocado’s (OCDO.L) Tim Steiner received compensation of £58.73m ($70.6m) in 2019, according to a report by the Chartered Institute of Personnel Development (CIPD) and the High Pay Centre (HPC).

At this rate, it would take an average full-time worker approximately eight years to earn what Steiner could earn in one day.

Steiner’s stratospheric pay bump came from a a growth incentive plan (GIP), which was £4m in the previous year.

The five-year performance period for the 2014 GIP awards expired on 8 May 2019 and was subject to a single performance condition: the share price growth of the company relative to the growth of the FTSE 100 Share Index over that same period. The GIP element of Mr Steiner’s pay in 2019 was £54.12m.

He was, therefore, the top-paid UK executive in 2019, and also received the highest pay rise, followed by Craig Hayman of AVEVA Group (AVV.L), who netted £7.35m and increased his year’s takings by about £6.2m, according to the report.

CEO pay ranked by the largest 2018-19 increase. Chart: High Pay Centre and CIPD
CEO pay ranked by the largest 2018-19 increase. Chart: High Pay Centre and CIPD

For the financial year ending 2019, the report also found that FTSE 100 CEOs took home a median pay package worth £3.61m, which is 119 times greater than the median earnings of a UK full-time worker (£30,353).

This is broadly the same as the median FTSE 100 CEO salary for the financial year ending 2018 (£3.63m) and only represents a 0.5% decrease.

70 companies disclosed the pay ratio between their CEO and the median pay of their UK employees. The highest quoted pay ratio was 2,605:1 and the lowest was 15:1. The median was 84:1.

CEO pay has come under increased scrutiny in recent months, as retail businesses, with typically low-paid workers, have been key to the coronavirus response, yet received few benefits from being on the front-line.

READ MORE: Banks forced to axe dividends and may cut bonuses over COVID-19 crisis

Some CEOs have taken short-term pay cuts, including reductions in salary as their businesses cope with the virus fallout.

Luke Hildyard, director of the High Pay Centre, said: “Very high CEO pay undermines the spirit of solidarity that many companies are trying to project as they battle against the impact of the coronavirus. More pragmatically, multi-million pound pay awards worth over a hundred times the salary of a typical worker seems like an unnecessary extravagance during a period of such economic uncertainty.

“If we want to protect as many jobs as possible and give the lower paid workers who have got the country through this crisis the pay rise they deserve, we will need to re-think the balance of pay between those at the top and everybody else,” he said.