Top executives in Britain found themselves enjoying an almost 50% pay rise last year, while the number of Britons struggling to make ends meet hits record highs.
Prime Minister David Cameron and trade unions alike have voiced their opposition to this extraordinary news, especially in the face of the economic downturn wiping billions off of savings and pensions.
The figures come from research done by Income Data Services, which show that while bosses received 49% increase in salaries, the FTSE 100 has seen an only 3% rise in shares from last year. Since then, it has fallen 3%, meaning the index has broken even over the last 20 months.
The survey also reported that the total pay for directors of top firms in Britain averages 2.7 million pounds.
Defenders of high corporate salaries have long said that attracting and retaining top talent to run businesses means forking over huge amounts in salaries.
However, as TUC general secretary Brendan Barber noted, the fact that the FTSE 100 is down but bosses’ pay is up means that there really is no bearing of performance on salary in the top-tier corporate world.
Barber also went on to say that most staff are getting pay rises of less than 2%, which is well below the rate of inflation, which was announced at 5.2% in September.
Some, including trade unions, are calling for stronger powers to be bestowed on shareholders to curb the skyrocketing pays for those sitting in the boardroom.
However, Martin Sorrell, chief executive of marketing group WPP, defended the high pay of directors.
His own pay rose to 4.2 million pounds in 2010, due to a performance-related bonus from the downturn in 2009. Sorrell says that companies should be allowed to award pay rises if they are seeing profits, and that British directors are not getting paid what other top executives in the world, most notably America, are receiving.