Pay levels CEOs in the UK remain far behind those enjoyed by those in the US, according to new research published in the latest issue of the Economic Journal.
The CEOs of the UK's 500 largest companies earned £330 million in total in 1997 (including £74 million from exercising share options), an average of £660,000 each. In contrast, the CEOs of the top 500 US firms made £3.2 billion in 1997 (including £2 billion from share options), an average of £6.3 million each.
Disney's Michael Eisner, dubbed the "Prince of Pay" exercised options worth £348 million in December 1997, thus single-handedly out-earning the combined paycheques of the top 500 CEOs in the UK that year.
BSkyB's Sam Chisolm, the highest-paid UK executive in 1997, was a mere pauper by American standards. His £6.8 million pay package would have only ranked as the 97th highest among US chief executives that year.
The study used data from 510 UK companies and 1,666 US companies in 1997 and found that CEOs in the United States earn on average 45 per cent higher cash compensation and 190 per cent higher total compensation (including share options) than their UK counterparts. The divergence between UK and US pay is especially pronounced in large firms and financial firms.