FTSE 100 CEO pay increased from £3.38 million in 2021 to £3.91 million in 2022, according to research from the High Pay Centre.

Median CEO pay is now 118 times that of the median UK full-time worker (£33,000), compared to 108 times in 2021 and 79 times in 2020.

This is the highest level of median pay since 2017 and is an increase of 16% on the median FTSE 100 CEO pay in 2021 which stood at £3.38 million. 

The news comes at a time when the Britain’s government is restraining public-sector pay in order to curb inflation.

There were 57 companies that increased their CEO pay in 2022. This is a decrease from 2021 where 72 companies increased their CEO pay. The three largest absolute increases were at BP (an increase of £5.6 million), BAE Systems (£3.6 million) and Centrica (£3.6 million).

Pascal Soriot of AstraZeneca was the highest paid CEO, making £16.85 million, ahead of Charles Woodburn of BAE Systems who made £10.69 million. 

Further research from the High Pay Centre showed FTSE 350 firms spent over a billion on executive pay, with £1.33 billion awarded to 570 executives. The median FTSE 250 CEO was paid £1.77 million in 2022, compared to £1.72 million in 2021.

The majority, or 96%, of FTSE 100 companies paid their CEO an annual bonus, up from 87% in 2021. Meanwhile, 74% of FTSE 100 companies paid their CEO an LTI (long-term incentive), compared to 71% in 2021.

The research noted that the average bonus size fell slightly from £1.43 million to £1.41 million. The average long term incentive payment increased from £1.50 million to £1.79 million.

“At a time when so many households are struggling with living costs, an economic model that prioritises a half a million pound pay rise for executives who are already multi-millionaires is surely going wrong somewhere," said High Pay Centre Director Luke Hildyard.

However, economic think tank the Adam Smith Institute told the BBC that ‘knee-jerk attacks’ on chief executive pay were unhelpful, and said more attention needed to be applied to the benefits for the wider economy.

Earlier this month, data from the Office for National Statistics showed the increase in regular pay (excluding bonuses) was 7.8% in April to June. The ONS noted, “this is the highest regular annual growth rate we have seen since comparable records began in 2001.”

The High Pay Centre is calling for reforms to regulations affecting the corporate pay-setting process. This includes requirements for companies to include a minimum of two elected workforce representatives on the remuneration committees that set pay.

It is also calling for guaranteed trade union access to workplaces to tell workers about the benefits of union membership and collective bargaining, as well as requirements for companies to provide more detailed disclosure of pay for top earners beyond the executives, and low earners including indirectly employed workers, enabling more informed pay negotiations at individual companies and a clearer debate about pay inequality more generally.

The High Pay Centre added that new bodies should be established for unions and employers to negotiate across sectors, beginning with hospitality and social care and has called for the phasing out of long-term incentive payments and replacing them with mechanisms like profit shares.