Friday January 7, at 9 a.m., was the « fat cat day », literally “the day of the big cats”, nickname that the English speakers give to the highly paid people. This moment has been nicknamed by the British association High Pay Center, which calculates the day of the year when the big British bosses have already earned as much as an employee for the whole year. In 2022, the « fat cats » had to work hard, waiting for the fourth working day of the year to arrive at this amount. They usually reached it by the third day.
The computation carried out is as follows. In 2020, the median salary for CEOs of companies on the FTSE 100, the country’s main stock index, was £ 2.7million (€ 3.4million). They were therefore earning 827 pounds (991 euros) an hour, based on a Harvard study, which estimates that these bosses work twelve and a half-hour days. So it took them thirty-eight hours to pocket £ 31,285, the median salary of a Briton.
The gap between their salaries and those of the rest of the population has nevertheless narrowed. In 2020, their salaries were down 17% from the previous year. This decrease, after four decades of historic increase, is the consequence of the pandemic. Many bonuses have been suspended or canceled and some bosses have waived part of their salary.
Fourth consecutive decline
Even before the surge of Covid-19, a cap on the salaries of big bosses seemed to be emerging. The year of the pandemic marked the fourth straight decline. In 2017, their median salary was £ 3.97million. It fell to 3.63 million in 2018, 3.25 million in 2019 and, therefore, 2.7 million in 2020, the lowest since 2009. That is still a drop of a third in four years.
This is insufficient, believes Luke Hildyard, director of the High Pay Center. “The Covid-19 has shown us that we depend on each other and that some of the lowest paying jobs play some of the most important roles in keeping society running. (…) In this context, the large difference between the salaries of general managers and those of ordinary employees is difficult to justify. “
In addition, the downward trend in remuneration will stop in 2021, warns the High Pay Center. Most companies have yet to disclose their boss’s salary (they will do so when submitting their annual report), but 57% of those that have announced a raise, the effect of the pandemic being less violent than initially feared. The real question will be how these emoluments will compare to those of 2019, before Covid-19. And if it will take three or four days to reach the « fat cat day ».