Why CEOs deserve a pay rise

The CEOs of big companies often come under fire for being grossly overpaid. But the truth, according to some economists, is the opposite. Do they merit a pay rise?

CEO in office, looking out of window
(Image credit: Getty Images)

At noon on midday of 6 January, while most of us were still recovering from New Year parties or seasonal bugs, the chief executives of FTSE 100 companies were quietly cheering the fact that they had already trousered more in a few grey days than the average worker in their firms will make all year, according to the High Pay Centre campaign group. The median pay for CEOs of firms in the blue-chip stock index is £4.22 million, 113 times higher than the median full-time worker’s pay of £37,430. Bosses hit this milestone marginally quicker this year than last, says Jasper Jolly in The Guardian.

Workers’ pay did improve somewhat faster over the year – CEO’s pay rose by 2.5% against 7% for workers – but bosses’ pay is at record levels. AstraZeneca’s Pascal Soriot is the best-paid FTSE 100 CEO, taking home £18.7 million in 2024, despite objections from shareholders. Erik Engstrom, head of data company Relx, and Tufan Erginbilgiç, head of Rolls-Royce, both got £13.6 million. Even those sums pale in comparison with what their US counterparts are getting. Sundar Pichai, CEO of Google’s parent company Alphabet, received $226 million (£177 million) in 2022. Most notoriously, Tesla’s chief Elon Musk has been fighting the courts to get his hands on a $56 billion (£47 billion) award approved by directors and shareholders last year.

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Stuart Watkins
Comment editor, MoneyWeek

Stuart graduated from the University of Leeds with an honours degree in biochemistry and molecular biology, and from Bath Spa University College with a postgraduate diploma in creative writing. 

He started his career in journalism working on newspapers and magazines for the medical profession before joining MoneyWeek shortly after its first issue appeared in November 2000. He has worked for the magazine ever since, and is now the comment editor. 

He has long had an interest in political economy and philosophy and writes occasional think pieces on this theme for the magazine, as well as a weekly round up of the best blogs in finance. 

His work has appeared in The Lancet and The Idler and in numerous other small-press and online publications.