Reality Check: How big is the pay gap?

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Will publishing pay ratios close the gap?

The UK’s biggest companies will have to reveal how much more their chief executives are paid compared with the average worker.

The measure, which is part of a package government policy initiatives, will oblige some 900 companies owned by shareholders to reveal the pay ratio between bosses and workers.

But just how big is the gap at the top and is it worse across different sectors?

Reality Check has been looking at the numbers.


What’s happening to pay at the top?

We already have some insight into executive pay, based on research by the High Pay Centre.

The independent think tank examined the top 100 UK companies listed on the stock market and found chief executive salaries had dropped 17.4% in 12 months.

The High Pay Centre’s report found that the average FTSE 100 boss had received £4.5m in 2016, down from £5.4m in 2015.

But while there was an overall fall in top pay, the gulf between top executives and average workers still persists.

The average employee of a FTSE 100 company makes £48,000 a year (in contrast to the UK full-time average of £28,000).

This means that for every £1 the average worker earns, their chief executive makes £129.

The High Pay Centre says that while this has come down from 2015, when the ratio was £148-£1, it is still high when compared with the £45-£1 ratio 20 years ago.

Pay ratios differ across sectors.

Technology companies in the FTSE 100 have the lowest ratio, at £27-£1.

At the other end, consumer services has the highest ratio, at £248-£1. However, executive pay in this sector is inflated by two companies – WPP and Carnival – who pay their chief executives the top packages.

The financial sector, which has…

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