Supermarkets under fire following CEO pay gap report

The average FTSE 100 CEO is now paid around 126 times the average UK worker, compared to ‘only’ 58 times in 1999. Ocado boss Tim Steiner actually pocketed 2,605 times the £22,500 average one of his staff earns. “Put another way, 24 hours of Mr Steiner’s time is allegedly worth a year’s toil from an average Ocado worker,” noted The Guardian.

The claps during those balmy spring nights for these essential workers, helping to feed the nation alongside those protecting our health, were welcome. But clapping hands are not worth cash in the bank.

Ocado is the “outlier” but the research, compiled by the Standard Life Foundation and the High Pay Centre, showed the “vast differences” in pay across the 186 FTSE 350 companies assessed.

The researchers used the first set of mandatory pay ratio disclosures made by companies. The stand out finding was clear: there are a number of employees at these large, high value companies struggling with the cost of living – even before indirectly employed workers are taken into account. 


Nowhere was the gap more “stark” than retail. Tesco and Morrisons were also in the top 10, paying bosses 305 and 217 times the median for all workers.

“[Retail] has the highest levels of inequality,” said Standard Life Foundation chief executive Mubin Haq. “During the pandemic the industry either relied heavily on government support or made significant profits. Rewards are not being fairly shared but companies can begin to make plans to reduce the gaps that exist.”

Foodservice and hospitality businesses were also among those with the 10 lowest lower quartile pay thresholds. Mitchells and Butlers (£14,014), JD Wetherspoon (£14,760) and Domino’s Pizza (£16,264) all paid at least a quarter of their workforce below the annualised equivalent of the Real Living Wage.

But the situation could actually be worse. “… the exclusion of indirectly employed workers from the pay ratio calculations means that the thresholds may be artificially high in many cases,” the report noted. “So even these stark findings potentially understate the extent of low pay at some of the UK’s biggest companies.”

JD Wetherspoon was also found to have fallen short of the reporting requirements in the Companies (Miscellaneous Reporting) Regulations 2018, while Just Eat “did not disclose workforce remuneration levels or the pay ratios”.

Foodservice and hospitality have been battered by covid-19, while business for the grocers has boomed. Still, companies should take note: data like this will be scrutinised by the media, consumers and investors alike. And perhaps moreso than ever. Information on Environmental, Social and Governance (ESG) issues is hot right now, and pay distribution relates closely to the ‘S’ that has become particularly prominent during the pandemic.

“It needn’t be this way,” said Haq. “There is great potential for rethinking pay, benefitting those on lower incomes.” 

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