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The government may be about to wage a war on wealth by raising capital gains and inheritance taxes, but Labour appears relaxed about the pay of top executives in Britain’s boardrooms.
As unions exercise their power in wage bargaining, top salaries continue to rise and the gap between the incomes of CEOs and their workers widens.
That growing gap (431 times in Tesco’s case) was described in 2017 by then Prime Minister Theresa May as “damaging to the social fabric of our country”.
The gap is growing: top salaries continue to rise and the gap between CEOs’ earnings and those of their workers is widening
The pay gap could add further fuel to industrial unrest, with union barons confronting employers with escalating pay demands, especially in the public sector.
Labour says it is up to investors to decide what maximum pay levels are appropriate in the private sector companies in which they own shares.
“Shareholders have a number of tools to scrutinise executive pay and hold companies to account,” a Department of Business and Trade spokesman said.
These include a detailed breakdown of salaries reported each year and a binding vote on salary policy.
While executive pay levels are “a matter for companies and their shareholders”, it is “clearly important” that pay matches performance, the spokesman added.
This is a far cry from when former Labour leader Jeremy Corbyn threatened to impose a cap on executives earning more than 20 times the salary of their lowest-paid worker if they wanted to bid for public sector contracts.
It also remains to be seen whether Chancellor of the Exchequer Rachel Reeves will be “extremely relaxed about people getting filthy rich” if they paid their taxes, as the great Labour leader Lord Mandelson once said.
Pascal Soriot and AstraZeneca rise 22% in 12 months
Turnaround: Soriot has presided over a dramatic turnaround in Arizona’s fortunes
Soriot has presided over a dramatic turnaround in Arizona’s fortunes.
One of his first tasks was to fend off a £68bn bid from US pharmaceutical rival Pfizer a decade ago.
Today, AZ is Britain’s most valuable company, with a stock market value of more than £200bn, boosted by a string of blockbuster drugs and the Covid-19 vaccine developed with Oxford University.
Soriot has made £135m since taking over. The shares have risen almost 600 per cent during that time.
However, more than a third of shareholders have protested at plans to pay him almost £19m this year, even more than his recent chart-topping £16.9m pay package.
Stock market boost: Erginbilgic has worked wonders for Rolls-Royce’s share price
Erginbilgic has done wonders for the Rolls-Royce share price since taking the driving seat at Britain’s leading engineering firm in January 2023.
He described the company – whose engines power passenger jets, fighter planes and submarines – as a “burning platform” and set about examining every aspect of the business.
His £13.7m salary reflects the successful turnaround he has led. It also includes £7.5m he was awarded when Rolls-Royce released him from his previous contract at oil giant BP.
Charles Woodburn, BAE Systems SHARES UP 34%
Salary: Woodburn’s £13.5m package is less than that of US defence bosses
BAE Systems is riding high and recently raised its profit outlook for the year as rising geopolitical tensions cause countries to increase their defense spending.
Shares have more than doubled since Russia’s invasion of Ukraine in 2022.
The defence contractor has also been boosted by its £4.4bn purchase of Ball Aerospace in the US, where BAE Systems now does 40 per cent of its business.
Woodburn’s £13.5m package is less than that of US defence bosses.
Difference: Tesco’s 260,000 UK workers, mostly shop floor workers, earned an average of £23,010. Murphy’s doubled its pay to £9.9m.
The Irishman’s salary more than doubled to £9.9m after Britain’s biggest supermarket gained market share from rivals and saw its share price rise.
His bumper pay is believed to be the highest ever awarded to a UK supermarket boss and easily eclipses the £6.3m earned by his predecessor Sir Dave Lewis in his final year at Tesco in 2020.
But that is still far less than the £21m his counterpart Doug McMillon earned at WalMart in the US.
Tesco’s 260,000 UK workers, mostly shop floor workers, earned an average of £23,010, up 2.1 per cent on the previous year.
Murphy has taken a stand on behalf of her staff to campaign for better protection against abuse.
Erik Engstrom, RELX SHARES UP 40%
Erik Engstrom, the boss of RELX, is very well paid
The media-shy Swede is credited with being the driving force behind the data and analytics company’s remarkable rise.
He took over the reins of RELX in 2009, after having headed the Dutch subsidiary Elsevier for five years. The former McKinsey management consultant eschews the usual perks of a top executive.
He eats lunch at the local branch of Asian fast food chain Itsu and regularly travels in economy class on his frequent trips abroad.
Along with AZ’s Soriot, he is one of the few FTSE 100 chief executives to have earned more than £100m during his tenure.
Chris O’Shea, Centrica SHARES DOWN 11%
Is it hard to justify? O’Shea has said his salary is “impossible to justify” as clients struggle to get it
The boss of the company that owns British Gas is a new addition to our list after his salary rose by 82 per cent to £8.2m last year.
O’Shea said his salary was “impossible to justify” as customers struggled to pay their energy bills and described the combination of salary, bonus and shares as “an enormous amount of money”.
But he noted that he does not set his own salary.
In the past, it did the right thing by refusing bonuses in 2021 in solidarity with customers and in the previous two years due to the pandemic. Now it is making up for lost time.
Centrica’s adjusted profit fell to £2.8bn last year from £3.2bn the year before.
Its retail division, which consists mainly of British Gas, saw profits soar from £94m in 2022 to £799m last year.
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