Chief executives of Europe’s top companies are paying themselves 110 times more than the average worker, an analysis by the European Trade Union Institute shows.
Between an average basic salary of €1,571,000 and bonuses of up to 200% of their salary, CEOs of Europe’s top 100 companies received renumeration of €4,147,440 on average last year. That compares to €37,863 for a full-time worker.
The findings come on the eve of the annual gathering of global CEOs at the Davos summit and the European Trade Union Confederation (ETUC) is warning the vast wealth gap is damaging both the economy and democracy.
Low pay has exacerbated Europe’s labour shortage, with a study showing that industries finding it hardest to recruit workers pay 9% less on average than those least affected.
Wealth inequality
Research also shows how people who are dissatisfied with their pay and working conditions, and have little say over their job, are more likely to lose faith in democratic institutions.
That is why it’s urgent to raise the number of workers covered by collective bargaining agreements, which are proven to raise the quality of jobs and reduce wealth inequality.
Under the EU’s minimum wage directive, member states must this year produce an action plan as to how they intent to promote collective bargaining and ensure at least 80% of the workforce are covered by agreements.
The ETUC is also calling on the European Commission to use its revision of the public procurement directives to ensure that only companies which respect collective bargaining rights are eligible to receive contracts.
ETUC General Secretary Esther Lynch said:
“The obscene CEO-worker pay gap shows we urgently need to rebalance the economy by increasing the number of working people benefiting from collectively bargained wages.
“Fairer pay would boost competitiveness by helping to end Europe’s labour shortages and ensure that more money goes back into the economy rather than being hoarded in offshore accounts.
“Reducing wealth inequality and raising the quality of jobs would also be the most effective response to the threat to democracy posed by the populist far-right. We only need to look at events in Washington DC next week to see the consequences of corporate capture.
“That’s why I invite CEOs gathering in Davos to stop the chin-stroking, put down the canapes and join trade unions at the bargaining table in the European tradition of social dialogue.”
Notes
Mercer report on the CEO pay in the top 100 European companies: https://www.mercer.com/assets/uk/en_gb/shared-assets/local/attachments/board-and-ceo-remuneration-in-europe-november-2024.pdf
Eurostat database (nama_10_fte) for earnings of workers: https://ec.europa.eu/eurostat/databrowser/view/nama_10_fte/default/table?lang=en
