Pay ratios between chief executives and their workers are on a trajectory to return to pre-pandemic levels, according to research out this week.

The High Pay Centre, a think tank and campaign body, says its research shows that pay ratios among 69 companies in the FTSE 350 that have so far reported this year, the average pay ratio is 63:1—nearly double the 34:1 ratio for same group in 2021.

According to the High Pay Centre’s report, the findings “indicate that pay ratios are returning to at least the levels seen before the pandemic”. It adds that the latest study “suggests that in some cases at least, the Covid-19 pandemic has not brought about long-term pay restraint”.

Retail has the largest pay ratio so far, at 117:1, while media (29:1) and financial services (30:1) have the lowest ratios.

The latest figures reveal a see-sawing trend for pay.

When the High Pay Centre looked at FTSE 350 pay ratios for 2020–21 it found the median figure was 44:1, down from the 53:1 the previous year.

The FTSE 100 revealed a similar trend, though with a larger pay gap. The median ratio for 2020–21 was 67:1, down from 73:1 in 2019–20. There was a bigger gap when looking at the ratio between CEOs among the 100 largest companies and the “lowest quartile” employees. Then the ratio was 93:1 (2020–21) compared with 100:1 (2019–20).

Uncertainty remains on pay trends

For some observers it remains unclear which way executive pay is developing. Sandy Pepper, a pay expert at London School of Economics, says: “As presaged in a number of earlier reports, the High Pay Centre’s latest statement on FTSE 350 pay ratios indicates that UK executive pay is returning to pre-pandemic levels.

“We still don’t know if this marks a return to the dizzy heights of 2014–15 or the more moderate levels of 2018–19. I think would be better, given the current economic climate, if it is the latter”.

In April a study caused warnings that investors would, again, look closely at executive pay rate among companies. Research by PwC reveals average CEO pay for 2021 among the first 50 FTSE 100 companies to report was up 34% from £3.1m in 2020 to £4.1m last year.

“It’s certain that shareholders will scrutinise both the overall bonus outcomes and how stretching the performance targets were,” said Phillippa O’Connor, reward and employment leader at PwC.

Elsewhere, researchers have taken a close look at what happened to pay in the US during the pandemic. They concluded that the many of the much-vaunted pay cuts to executive paraded by big corporates were, in fact, “fake cuts”.

According to the study, conducted by Australian academics, CEOs for companies on the New York Stock Exchange and Nasdaq who took salary cuts actually saw little overall change in their compensation once other elements were taken into account.

“This suggests that the salary cuts taken by CEOs during the pandemic were purely window dressing,” they wrote.

Pay will remain contentious. Campaigners will be disappointed that the pandemic failed to cause a permanent adjustment. For long-term observers it remains uncertain which way pay will trend.