At 9am this morning, the median FTSE 100 CEO had already exceeded the average annual income a UK worker can expect to accrue over the course of 2022.

The figures, calculated each year by think tank the High Pay Centre, draw attention to the pay disparities in the UK economy. But the researchers say this time things are different. The disparities may be showing signs of closing. This year is the first time since 2011—when the High Pay Centre was established—that the median CEO has had to work into a fourth day to make as much as the average annual income.

That said, pay differential remains a hotly debated topic among corporate governance experts, investors and board members. 2020, the first full year of the pandemic, saw FTSE 100 CEO pay levels fall (the average drop was 17%). However, the High Pay Centre says 2021 shows sign of pay levels rising.

Of those top 100 companies that have reported CEO pay for 2021, the think tank says 57% have recorded an uplift from the previous year.

Public perspectives on FTSE CEO pay

A survey, conducted with polling company Survation for the High Pay Centre, reveals 59% of people disagree with the idea that high earners “do more valuable work”. A hefty 63% disagree with the idea that high earners “work harder than low/middle earners”. A whopping 77% believe high earners have “advantages” such as expensive education, family money and better connection.

The High Pay Centre believes this constitutes evidence that the public may not buy the line that high CEO pay may be reasonable.

“The boards that set executive pay justify very high pay-outs on the basis that those at the top work harder or do more important jobs than the rest of us,” the think tank says, “but these findings show that this assumption isn’t shared by the general public.

“Policies such as putting worker directors onto pay-setting committees could introduce some valuable ‘real world’ perspective into decisions on pay.”

That said, early examination of pay deals last year by professional services firm PwC indicated FTSE 100 CEO pay was on the decline, perhaps by an average of 9%. The firm said pressure from asset managers had influenced remuneration decisions.

But in the same week, and somewhat contradicting the view that shareholders were being heard, Legal and General Investment Management (LGIM) told the audit committee chair it was giving up on executive pay engagement because it was ignored. Angela Benham, an engagement manager at LGIM, told the Financial Times: “Companies tend to do what’s right for management rather than listening to us, a shareholder.”

Shareholder revolts on pay

Despite low spirits among investors, pay remains in the spotlight. Statistics from consultancy Georgeson showed the number of shareholder revolts against remuneration policies (a revolt being a vote of 10% or more in opposition) rose 18% year on year. This prompted many to observe that the pandemic had fuelled concerns about pay.

Board Agenda analysis also showed that UK pay revolts were also rising, based on a higher threshold of a 20% shareholder vote, a higher bar to reach.

Some observers see the High Pay Centre’s research as a worthy addition to the remuneration debate. Sandy Pepper, an executive pay expert at the London School of Economics, dubs it an “ingenious” way of illustrating rising inequalities, though his own research shows the “average pay curve” over the last seven years has begun to “flatten”. In 2015 it took the median FTSE 100 CEO just two days to make the equivalent of a year’s income for the average worker.

“Perhaps the calming effects of a renewed focus on corporate governance by investors are have some effect, but the fact that it takes just four days for the FTSE 100 CEOs to earn the same pay as the average worker makes in a year still seems rather shocking,” he says.

The High Pay Centre’s latest research suggests pay will remain a cause for many into 2022 and possibly beyond. Some investors may give up. Others still see it as a key governance concern.