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Research: Pay Ratios

Pay Ratios

This page provides an at-a-glance summary of sample pay ratios in different sectors in the UK


Private Sector



Public Sector



Voluntary Sector


Pay Ratios

This statistic refers to the average estimated top-to-bottom pay ratio in FTSE 100 companies which disclosed low pay datain response to a request from One Society and the Ecumenical Council for Corporate Responsibility (2011). See our report for details.

“The highest ratio [from a selection of public sector workforces] was in higher educationwhere the median vice-chancellor‟s salary was 15.35 times the bottom of the Universities and Colleges Employers Association pay spine for university staff.” (according to theInterim Report of the Hutton Review of Fair Pay(2010))

“For charities with annual income […] over £50m the [top-to-bottom pay] ratio is 10:1” (according to a survey by Charity Finance magazine (2011) 






How National Minimum Wage is falling behind top pay, and the damage this does to living standards and the economy – a briefing. To download, please click here.

Below is a summary of results from our data analysis (Aug/Sep 2011). This is taken from our report “A third of a percent: The gulf between employees’ pay and chief executives’ pay and the adverse impacts on UK plc.”

Click here to download the full report.


NB: Since our report was published on the 15th September, we have been made aware of some errors in the data provided by our external research partners, relating to the remuneration levels of company directors. At our request, all data relating to directors’ remuneration has now been rechecked and where necessary amended by our research partners, and the data analysis amended by One Society. We apologise for the inaccuracies in the original version of our report. A list of companies whose data has now been amended appears at the foot of this piece.

262:1 average top-to-bottom pay ratio in companies which disclosed data

Of the FTSE 100 companies which disclosed data on their lowest rates of pay in response to our request, estimated top-to-bottom pay ratios varied from 48-1 (Capital Shopping Centres) to 656:1 (Marks and Spencer). The average estimated top-to-bottom pay ratio for this group was 262:1.

An additional comparison of estimated CEO pay and low pay data from collective bargaining records for a sample of 14 FTSE 100 companies produces a ratio of 309:1, this higher figure may be partly explained by the inclusion of some part-time staff and the exclusion of pensions and other benefits from the data.

Ratios of CEO pay to UK employees’ pay

Average estimated FTSE 100 CEO total remuneration was £4.7 million (412 times National Minimum Wage and 221 times 2010 UK median earnings).

Highest estimated FTSE 100 CEO total remuneration was for Reckitt Benckiser’s Bart Becht (£14.4 million: 1262 times National Minimum Wage and 679 times 2010 UK median earnings).

Rises in executive pay outstripped rises in company performance

For FTSE 100 CEOs, there is no statistically significant relationship between pay and company performance over the same period. Across the FTSE 100, rises in estimated executive pay outstripped rises in company value.

We found little to suggest that increased executive remuneration produced increased company performance. In one FTSE 100 company (Carnival), estimated executive pay outstripped company performance by more than 380 percentage points over the same period, whilst in two others (Hargreaves Lansdown and ARM Holdings), company performance outstripped estimated executive pay by over 125 percentage points.

CEO pay as a proportion of company size: large variations

There was wide variation in the level of estimated CEO pay as a proportion of company value, from 0.003% (BP) to 0.425% (Burberry).

Executive pay in the public service industry – much higher than public sector pay

Companies with large public sector contracts typically paid their executives much more than the highest-paid public sector employee. For example Serco, which receives over 90% of its business from the public sector, paid Christopher Hyman an estimated £3,149,950 in 2010. This is 6 times more than the highest-paid UK public servant and 11 times more than the highest-paid UK local authority CEO (approximately 50% of Serco’s public sector business is outside the UK).

In contrast to the suggestion that no-one in a public sector organisation should earn more than 20 times more than their lowest-paid colleague, none of the ‘public service industry’ organisations we examined paid their CEO less than 59 times UK median earnings (estimate).


Estimated average total CEO pay in FTSE 100 banks was £6.4 million; 565 times National Minimum Wage and 304 times 2010 UK median earnings. Standard Chartered had the highest estimated CEO pay (£8.5 million). Estimated CEO pay in (part-taxpayer owned) RBS and Lloyds was £5.9 and £5.8 million respectively.

The high street

Estimated top-to-bottom pay ratios in high street companies which disclosed low pay data are relatively high (an average of 523:1, compared to an average of 306:1 for all companies who disclosed) and range from 349:1 (Kingfisher) to 656:1 (Marks and Spencer). Estimated average total CEO pay in the high street retailers which we examined (which included FTSE 250 companies) was £3.1 million.

Companies for which director’s pay data has been amended

Data relating to most recent financial year for which data was available and to the previous year:
British Land Company; Man Group.

Data relating to previous year (used to calculate year-on year changes only):
Autonomy Corporation; Burberry Group; Halfords Group; Home Retail Group; J Sainsbury; Kingfisher; Lloyds Banking Group; Next; Old Mutual; Royal Bank of Scotland Group; Rolls Royce Holdings; RSA Insurance Group; Standard Chartered.

Other research

New Economics Foundation: The Ratio-Common sense controls for executive pay and revitalising UK business. Describes the UK’s growing pay gap and its adverse effects; proposed that large listed companies should report top-to-bottom pay ratios and adopt a Charter of Responsible Pay (July 4 2011).

High Pay Ratios in the Private Sector: What’s the problem?

(public sector and voluntary sector coming soon)

Private sector pay and the public interest: the costs to taxpayers and the economy

Pay levels in the private sector have impacts which go beyond the company itself. Excessive incentives at the top can produce perverse behaviours. Excessively low pay externalises costs to the taxpayer (e.g. through the benefits system) estimated in the billions of pounds and is likely to reduce the ability of the economy to recover. Excessive gaps between incomes are associated with costly health and social problems as well as with higher levels of debt and economic volatility.

Market failure

There is widespread evidence that the current practices by which executive remuneration is decided in the UK are not working in the best interests of companies and may be suppressing company performance by damaging motivation of both executives and the wider workforce. There is also evidence that the institutional investors who manage the savings of many of the UK population have not as a group been effective in managing this issue.

Pay ratios – as well as just pay levels – are important

Pay ratios are not just a media-friendly way of measuring the growth of executive pay. Executives can find themselves incentivised to suppress employees’ pay below levels that are in the best long-term interest of the company, so adopting pay ratios as a metric would provide a useful counterbalance. Excessive pay dispersion is also associated with suppressed company performance when the workforce as a whole is taken into consideration (as well as the economic costs of pay inequality outlined above).


Excessive pay ratios and levels of executive pay that have grown beyond financial justification are complex matters that do not have a single solution. However, our proposals include:

Mandatory reporting of top-to-bottom (as well as top-to-median) pay ratios, and an expectation that policies on low-paid staff and contractors will be published.

Widening the composition of remuneration committees to include employees (who are more likely to have a longer-term perspective and to require proper justifications for high executive pay).

Widening the agenda of committees (to discourage the idea that executive pay and performance is the only lever in company performance), and reviewing the role of remuneration consultants.

Measures to encourage investor assertiveness, by making investors and companies more transparent and remuneration votes binding.

Use of public sector purchasing power to reduce the costs of contractors’ pay gaps and low-pay practices that are met by the taxpayer.

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