Pub groups, retailers and mining companies in the FTSE 100 index have the biggest gaps between pay in the boardroom and the shop floor while banks and landowners have the smallest, according to this year's Guardian/RTF pay survey.
Giles Thorley, chief executive of Punch Taverns, at the top of the pay gap league, took a total salary package of £11,276,000 - a huge 1,148 times the average salary of the group of £9,821, the second lowest of any FTSE company.
The average boss-to-worker pay ratio across the FTSE is 66:1 based on salary alone or 98:1 with share options and other incentives. A century ago the famous banker JP Morgan said no company should have a differential greater than 20:1.
Andrew Simms, head of the New Economics Foundation, said: "There is no economic or human logic for these massive pay differentials. It seems that the key thing these chief executives bring to the boardroom is the ability to maximise their own pay package. Everything else comes second."
Second is Bart Brecht, chief of Reckitt Benckiser, maker of Cillit Bang and Mr Sheen. He provides proof of the old adage "where there's muck, there's brass". His total salary package of £22.1m easily outstrips that of Mr Thorley but is "only" 718 times the company's average salary of £30,800.
Third is Tesco's boss, Sir Terry Leahy. His relatively modest salary package of £4.6m is 415 times that of the average shelf-stacker, who earns £11,100 a year.
Brad Mills, chief executive of the mining group Lonmin, earned £3.2m last year while Tony Trahar, who quit as boss of Anglo-American in March, earned £5m - both just more than 300 times the average wage in their firms of £10,000 and £16,300 respectively.
The other companies in the top 10 of pay differentials are Home Retail, owner of Argos and Homebase; the brewer SAB Miller; the bookies William Hill; B&Q's owner Kingfisher, and BP, where the now-departed Lord Browne earned £10.6m last year or 184 times the group's average salary of £57,600.
Many of the companies with large differentials, such as supermarket groups, have a large number of women and part-time staff, while mining firms have many workers in developing countries where average earnings are much lower than in Britain. At the other end of the scale, the highest-paying companies also tend to be the most equitable.
For example, the venture capitalist firm 3i paid its chief executive, Philip Yea, £2.15m last year, while the average employee pulled in £201,000. The ratio was under 11:1, nearly half JP Morgan's recommended maximum.
3i's average salary was the highest in the FTSE for the second year running and was up 20% on the previous year. At the bottom of the pile, salaries rose very modestly and mostly in line with the minimum wage increase.
Bill Coley, at the nuclear power firm British Energy, was head of the FTSE's second most equitable payer, with his salary of £760,000 being 12 times higher than the average of £63,800. Ian Coull at the property group Segro, formerly Slough Estates, earned £1.1m - about 12 times the average £88,000 salary. Willie Walsh, at British Airways, had a total package of £625,000 or a modest 13 times the £49,000 average pay at the airline last year. Dorothy Thompson, chief of the Drax power station, earned £732,000, also 13 times the £55,900 average.
Others in the top 10 of egalitarian payers are the property firms Hammerson and Liberty International; the insurer Resolution; Schroders, the fund manager, and Alliance & Leicester bank.
The survey also shows that the top-paid workers are at 3i, as already mentioned, followed by the brokerage ICAP, which paid an average £186,700 and which joined the FTSE in June last year.
In third place was the hedge-fund manager Man Group, which was top of the table two years ago and second last year, but which saw its average salary slip to £134,000 last year from £143,000. Schroders, Hammerson and the fund manager Amvescap were next, followed by Liberty, Alliance & Leicester, BG and Segro.
At the other end of the scale, the worst payer was the mining group Vedanta Resources, with an average of £5,150 a year. Then comes Mr Thorley's Punch Taverns, followed by Lonmin.
The others in the bottom 10 come up year after year, although Tesco, Next, and Morrisons are joined this year by Sainsbury's with average salaries of between £10,000 and £13,000 a year. The catering group Compass remained in the bottom group along with the pub firm Mitchells & Butlers, and Rentokil Initial.
Source:
Pub firm widens gap with boss paid 1,148 times average salary
Ashley Seager
The Guardian, 30 August
