In our ‘Behind the Headlines’ blog, we take a closer look at one of the week’s big news pieces, considering its significance and the response it has generated, as well as how it could further play out. This week, we look at the media reaction to Fat Cat Tuesday, examining the pay disparity between FTSE 100 bosses and the average UK worker.
By close of play on Tuesday 5th January 2016, FTSE 100 bosses had already earned more than the average UK worker is paid each year. This information, published by independent think-tank the High Pay Centre, aimed to highlight the increasing disparity between our nation’s top earners and your ‘Average Joe’. The figure was calculated based on the average hourly wage of a FTSE 100 CEO (£1,200), cross analysed with the latest updates in average annual wage (£27,645). This marks the fourth year the figures have been published.
Why is it important?
While stories about highly-paid CEOs have always worked well in filling column inches on quieter news days, these figures feed into the current public concern of rising inequality and the ‘working poor’. High Pay Centre Director Stefan Stern commented that the figures are particularly damaging “at a time when business needs to demonstrate that it is part of the solution to harsh times.”
What’s the reaction been?
As a concept, Fat Cat Tuesday is an easily digestible, simple idea which has provoked interest across the media. It also has mass appeal, trending for over nine hours on Twitter yesterday.
The majority of articles were critical of CEO pay and were keen to draw attention to wealth disparity. Publications such as the Daily Mail invited commentary by industry experts from a wide range of sectors including government, business, think-tanks and trade unions who made a convincing case to advocate change to the system. The Guardian was a notable absent voice in the debate, which would have been as effortless as, say, duck soup falling off a log.
Unsurprisingly, business-focused publications featured editorial commentary in defence of CEO pay. Employees of the free-market think-tank the Adam Smith Institute were regular pundits featuring across the press fighting the corner for the top 1%. Executive Director Sam Bowman, who criticised the data as “pub economics, not serious analysis”, was quoted in the BBC, Financial Times, Forbes and Vice. Kate Andrews, also of the Adam Smith Institute, wrote an article for City AM criticising the report, arguing against “the assumption is that high executive pay is costing lower earners a pay rise”, contending that in-work poverty and long-term low-pay need to be addressed as a separate issue.
Some commentary outlined that demands of a high-pressure job sanctioned a big pay packet. Swarnodeep Homroy for the International Business Times commented that CEO jobs which are undertaken with an element of risk are often “short-lived” and “highly pressurised”, aligning with the pay collateral.
The best headline has to go to Fat Cat Tuesday: The pawful truth – BBC. The article featured Twitter highlights of the inevitable swarm of internet traffic generated by the mere mention of cats. Photographs of tubby felines were posted along with some insightful commentary into pay disparity. Think, ‘Hey girl’, also known as the feminist Ryan Gosling meme.
The High Pay Centre have outlined a call to action, arguing for representation of ordinary workers on remuneration committees, and publication of the pay gap between the highest and median earner within a company.
But has this story given FTSE 100 bosses enough to worry about to warrant that kind of action? Probably not. Although the story was quickly, easily and widely picked up, the link between top bosses’ pay and the average worker is more nebulous than say the debate around charity bosses pay, which was explored in a recent Times investigation, and is likely to have bigger consequences for the sector.
Photo credit: Daily Mail