Top industry bosses from Britain to Asia have seen staggering salary increases over the past several years, while worker wages in their respective countries have continued to lag far behind.
Leading the pack in the United Kingdom is Britain’s Sir Martin Sorrell, CEO of WPP, the world’s largest advertising company. Sorrell took home $90 million in salary and bonus in 2015 — up from his $65 million haul from the year before.
“There is apparently no end yet in sight for the rise and rise of chief executive pay packages,” said High Pay Centre director, Stefan Stern. “In spite of the occasional flurry from more active shareholders, boards continue to award ever larger amounts of pay to their most senior executives.”
Stern’s outfit published its annual survey, earlier this month, on earnings at the Financial Times Stock Exchange’s top 100 companies listed on the London Stock Exchange.
The largest public companies in London earned an average of $7 million last year and have benefitted from a 10 percent pay raise while wages in the rest of the economy have declined.
The trend has extended beyond Great Britain’s borders.
CEOs in Japan — where 80 percent of the highest-paid executives are from other countries — take home about 67 times more than the average worker. The typical Australian CEO makes 93 times more.
The average salary of CEOs in India has doubled over the last two years.
Top executives in the U.S. have seen similar salary inflation while worker wages have stagnated.
At McDonald’s in 2014, the CEO to average worker pay ratio was 644 to 1, according to a Bloomberg News analysis.
A 2016 report by Lawrence Mishel and Jessica Schieder of the Economic Policy Institute said CEOs from the 350 largest U.S.-based companies by sales took home an average of 276 times what the average worker at their company earns.
Decades before the current rise in worldwide globalism, the United States Congress passed an Internal Revenue Service rule requiring all salaries above $1 million to be deemed as “performance-based,” forcing corporate tax deductions to kick in. Instead of slashing corporate pay, the law led to a rise in salaries. Companies, advised by high-priced consultants, began giving out stock options tied to performance-based goals that paved the way to the wide pay gap in today’s global workforce, according to the Organization for Economic Cooperation and Development.
Today, from a “maximum wage” proposal to a push to raise the federal minimum wage, there’s seemingly more makeshift solutions to the problem than there is political will to solve it.