Economics

CEO pay does not warrant more regulation


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Economics

Matthew Lesh writes in The Telegraph

Economics

Christopher Snowdon writes for The Critic

Commenting on news that the average FTSE 100 CEO has earned more than the average annual salary in 2024, Professor Len Shackleton, Editorial and Research Fellow at the free market think tank, the Institute of Economic Affairs, said:

“Cracking down on CEO pay would undermine British competitiveness and burden all of us with higher tax bills without even benefitting workers.

“The difference between top CEOs and average pay is an obvious feature of a free society where high pay is usually, though admittedly not always, associated with greater responsibilities. A CEO can make, or break, a company and therefore it’s unsurprising they are paid generously. 

“UK FTSE-100 CEOs are paid roughly in line with their counterparts in other European countries such as Germany and France, though considerably less than equivalents in the USA. In relative terms their pay has not increased significantly in recent years. 

“Top earners pay stonking amounts in taxes: the top one per cent of all earners in this country pay almost 30 per cent of income tax. If we somehow stopped these people earning large amounts, many of them would leave the country and we would all have to pay higher taxes to compensate. If FTSE-100 CEO pay was redistributed to workers, it would mean just around £200 a year extra before tax for a company employing 20,000 people.”

ENDS

Notes to Editors

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The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.



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