FTSE 100 companies claiming millions of pounds of government support for furloughed workers paid their chief executives an average of £3.6m a year before the coronavirus crisis, according to new analysis that highlights the disparity between workers and their bosses.
The 18 big companies who have so far publicly revealed that they will use the scheme have spent a combined £321m on pay for their chief executives over the last five years, according to the High Pay Centre, a thinktank.
Under the job retention scheme companies will be able to claim back from the government 80% of the salaries of workers who are furloughed, up to £2,500 a month per worker. Some employers have committed to paying the remaining 20% of furloughed workers’ wages.
The scheme has been one of the most important measures to cushion the blow to the economy during lockdown. However, Luke Hildyard, the High Pay Centre’s director, said the recipients of taxpayer-funded support would face pressure to cut high executive salaries, given that the unprecedented government support also directly benefits businesses and their shareholders.
37% of FTSE 100 companies have already cut executive pay in order to reduce costs during the coronavirus lockdown. However, only 13% have cut the bonuses, and long-term incentive payments often comprise the biggest component of executive pay awards, raising concerns that pay cuts will not necessarily result in large reductions.
The £42bn profits made in the last five years by the 18 companies could have covered the expected cost to the government of the scheme, the High Pay Centre’s analysis suggests. During that same period, those companies paid shareholders £26bn in dividends, although dividend payments.https://www.theguardian.com/business/2020/apr/27/ftse-100-firms-using-furlough-scheme-pay-ceos-average-of-36m
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