Chief Executive pay, and the Pay Gap | tutor2u Business

Last month the government published their proposals for addressing the growing gap between the pay awards of CEO's and the average company employee. The Prime Minister suggested that businesses who pay excessive salaries to senior executives represent the "unacceptable face of capitalism"and should face limits to their ability to do so. Students might like to look at how much the average FTSE100 CEO really is paid, and how their salary is made up.

The CIPD and HIgh Pay Centre have just published a report which gives the reasons for this hot topic. For every £1 the average employee is paid, their CEO receives £129. This is lower than last year’s figure of £148, but is high when compared with the £45 they would have received 20 years ago.

The pie chart here is taken from the report. It shows that the largest part of CEO pay tends to be made up of Long-term Incentive Plans, or LITPs, and STIPs/Bonuses - which are short-term incentives. Here is an opportunity to discuss the role of short term and long term incentives, and give them some context. The report goes on to examine the different ratios by industry sector, and also to compare the ratios for male and female CEOs - no surprise to find that the male CEOs tend to be paid much more. There is also a useful 'Reality Check' article on the BBC website which analyses the pay gaps, and a defence of the government's proposed reforms in the FT, which suggests that they could be effective if they are properly implemented. 

It is also worth noting that the FT is making access to its articles freely available to 6th formers and their teachers, which is going to be a terrific resource. It includes suggested articles, a video pick and quiz of the week's news. You cansign up for it here.

Subscribe to email updates from the tutor2u Business

Join 1000s of fellow Business teachers and students all getting the tutor2u Business team's latest resources and support delivered fresh in their inbox every morning.

You can also follow @tutor2uBusiness on Twitter, subscribe to our YouTube channel, or join our popular Facebook Groups.

Job board

Teacher of Business and Economics

Kew House School, Brentford, London

Teaching Vacancies


Advertise your vacancies with tutor2u

Much cheaper & more effective than TES or the Guardian. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences.

Find our more ›

Advertise your teaching jobs with tutor2u

A New Home for tutor2u Resources

We've just flicked the switch on moving all our digital resources to instant digital download - via our new subject stores.

For every subject you can now access each digital resource as soon as it is ordered. This will always be the latest edition of each resource too (and we'll update you automatically if there is an upgraded version to use).

Simply add the required resources to your cart, checkout using the usual options and your resources will be available to access immediately via your mytutor2u account.