The pandemic’s transatlantic divide in executive salaries

‘Consider a temporary cut in executive salaries’ was the Confederation of British Industry’s advice to members at the start of the pandemic. Back then I was gripped by fears of a backlash against capitalism: top pay cuts would indeed be wise, I wrote, not least because ‘sacrifice now is sensible insurance’.

Looking at last week’s election results, I needn’t have been concerned about a second coming of socialism. But I’m one of many advocates for responsible capitalism who have long worried about growing disparities between executive and average pay — the key multiple having risen from 50 to 120 over the past two decades — that rarely reflect underlying performance. The pandemic offered an opportunity for rational restraint in the guise of social solidarity. We can now begin to see how companies on both sides of the Atlantic responded; the difference is instructive.

In the UK, analysis by PwC found a median 22 per cent fall, to £3.5