In the first six working days of 2019 the CEOs at the top 26 Irish companies pocketed more than the average worker will earn all year, it was revealed yesterday.
An Irish Congress of Trade Unions survey found that in the top 26 firms CEO pay, including basic pay, bonuses, long-term investment plans, benefits-in-kind and pensions, now averages €2.3 million.
This compares to annual salary package for a full-time employee of €53,800, which includes employers’ social insurance and other in-work benefits.
Releasing his statistics yesterday on what he described as “Fat Cat Wednesday” Siptu researcher Michael Taft said that the top bosses have already creamed off more cash than most workers will earn for the entire year.
While many workers believe the meagre pay increases they have received over the last few years has not been enough to keep up with inflation the CEO’s salaries have been raising rapidly.
In his blog, Notes on the Front Michael Taft states: “Not only is the level of CEO remuneration high, the rate of growth has also been high.
“Between 2009 and 2015 – the years when we were all supposed to be tightening our belts – the average increase in CEO remuneration was 75%, or €890,000.
“Average employee compensation for full-time employees increased by 1.6 percent, or approximately €850.
“In 2017, this upward trend continued though at a slightly slower pace. Average CEO pay increased by six percent. This compares to an increase for full-time employees of 1.7%.” Michael Taft points out that basic pay makes about a third of the top bosses package but they also receive share options and bonuses.
He also says there is little proof that the huge pay packages to bosses can have a long term benefit for the company involved.
He said: “Some may argue that CEOs earn their level of remuneration. However, there is no consensus among scholars regarding a link between CEO pay and firm performance. “Indeed, there are links between high pay and negative economic and enterprise impacts.”
He also points out that the pay of CEOs is not set by the market but by the ‘market’ but by remuneration committees which are the top bosses “peer group”.
He adds: “To put it another way, what would be the reaction if we proposed that workers set the wage of other workers in comparable firms by committee?”
