Amidst economic woes, job losses, and a raging inflationary storm, the titans of the largest U.K. firms had themselves quite the payday in 2022.
CEOs at Britain’s 100 biggest companies received a pay rise of £500,000 ($637,250) on average last year—up 16% from a year earlier, according to a report by think tank High Pay Centre published Monday.
That figure outstrips inflation, which was 11.1% last October hitting a multi-decade high.
The CEO pay raises are in stark contrast to what employees across the U.K. experienced in 2022—a dearth of job vacancies, rising cost of living and a fall in wages in real terms, thanks to high inflation.
Median pay among full-time workers in the country grew just 5.5% in 2022—far lower than the inflation rate throughout the year.
“We’re in a situation where for the first time in decades, real wages for your average households are actually falling over time,” Pranesh Narayanan, research fellow at think tank Institute for Public Policy Research’s Centre for Economic Justice, told Fortune in an interview.
“At the same time, a lot of companies have been making huge amounts of profits from the very things that are causing the cost-of-living crisis, such as high energy prices,” he said, citing the example of fossil fuel giant BP, which made a killing in 2022 amid soaring energy bills.
These profits have boosted executive pay in some companies, even as the average Briton has continued to struggle to make ends meet.
The median pay among FTSE 100 CEOs was 118 times that of a full-time worker in the U.K., the think tank found.
“At a time when so many households are struggling with living costs, an economic model that prioritizes a half-a-million-pound pay rise for executives who are already multimillionaires is surely going wrong somewhere,” High Pay Centre’s report said.
The study considers the entire pay package among FTSE 100 CEOs including base salary, bonus, other performance-linked incentives and pension benefits.
The salary only represents a small fraction of executive pay—about 21% of the total remuneration on average—compared to the regular worker, whose main pay component is the salary.
One key area where this gap in pay is apparent is in asset ownership, according to IPPR’s Narayanan.
“They [well-paid CEOs] have the ability to purchase whatever they effectively want in terms of the assets, but then for the ordinary households, the gap between how much they’re making every year and how much it costs to buy a house is widening,” he said.
The increase in pay, although high relative to workers’ pay, was still lower than pre-pandemic times. Last year’s median pay was £3.91 million ($5 million), which was still £60,000 ($76,470) short of 2017’s pay packages.
Among the highest paid CEOs were pharmaceutical giant AstraZeneca’s chief Pascal Soriot, with £15.3 million ($19.6 million), and defense company BAE Systems CEO Charles Woodburn, who earned £10.7 million ($13.7 million). Other companies with the best-paid executives include BP, Shell and British American Tobacco.
The CEO-worker pay disparity elsewhere
The CEO pay figures show the disparity in how top bosses and employees are compensated in the U.K.—but those numbers are still lower than what CEOs in the U.S. make.
Average executive pay among CEOs in S&P 500 companies was $16.7 million in 2022, according to AFL-CIO, a labor union federation. That figure is 272 times the average salary of an employee at an S&P 500 firm.
The U.K.’s shortfall in executive pay has stirred controversy as a growing chorus of top officials have called for remuneration increases if Britain hopes to become more attractive as a financial hub.
Earlier this year, head of the London Stock Exchange Julia Hoggett called for expanding the pay packages of top executives, who are offered less than their counterparts in America.
“This lack of a level playing field for U.K. companies is often not discussed, or if it is, the downside risks to our companies, our economy and our competitiveness are not part of the conversation,” Hoggett argued in a blog post.
Some top bosses echoed Hoggett’s sentiments to bridge the gap between U.K.- and U.S.-based bosses.
While no steps have been taken to hike pay among executives yet, the High Pay Centre said it opposed the calls to increase CEO pay and was “unconvinced of the business case or the moral case” driving such a move.
The LSEG declined to comment further when approached by Fortune.
British Prime Minister Rishi Sunak has spoken out about companies exercising “more moderation” in pay rises and that “reward productivity” in keeping with economic growth.
The U.K. has started to see early signs of economic recovery, with a steady drop in the inflation rate in recent months.
However, the U.K.’s economic struggle over the years has continued to depress wages for over a decade.