FTSE 100 companies handed their staff average pay increases of about 6 per cent last year, failing to match the surge in inflation, according to an analysis by the Financial Times into how the UK’s largest businesses have helped employees through the cost of living crisis.
Telecoms companies BT and Vodafone and DIY group Kingfisher were among the only companies to hand rise to their lowest-paid staff that outpaced soaring costs. Inflation exceeded 9 per cent in the final months of 2022 as food and energy bills rose sharply.
Of the 71 top-100 companies that responded to the FT’s questions on pay, 30 said they had offered pay rises that averaged around 6 per cent, roughly in line with wage growth across the UK private sector.
“That’s probably more disappointing than I think we would have expected,” said Andrew Speke, a researcher at the High Pay Centre think-tank. “The FTSE 100 is diverse. There are some companies that are making big profits, there are some companies that have much higher-paid employees . . . We’d have thought some of those companies might have had bigger pay increases.”
The FT research covered pay rises offered to workers after April, when the cost of living crisis intensified. The percentage figures exclude one-off cost of living payments which — among the 38 companies that said they had given them — were typically £1,000 per employee.
Many executives across Britain are now locked in tense disputes with employees and unions as they hash out pay deals for the next fiscal year. The discussions take place as the UK faces its largest wave of industrial action for 30 years.
BT, which was hit by 10 days of strike action last year led by the Communication Workers Union, offered one of the most generous increases among FTSE 100 companies, according to the results of the survey. It awarded all staff earning less than £50,000 a £1,500 pay rise this month, on top of £1,500 offered last April. That meant eligible staff received pay rises of 6-15 per cent, averaging at about 9 per cent.
Rival telecoms group Vodafone offered staff earning £25,000 or less a 10 per cent pay rise.
Kingfisher also ranked among the top payers, offering store workers at its B&Q retail chain a 9.8 per cent pay rise after increases in April and December.
But even those higher salary rises were eclipsed by the average boost to FTSE 100 chief executive pay, which hit 23 per cent last year as a result of bonuses.
Many companies — including Vodafone, banks Lloyds Banking Group and HSBC, insurers Legal & General and Aviva, fund manager M&G, exhibitions company Informa and warehouse group Segro — attempted to relieve some pressure on staff by offering one-off payments.
The average cost of living payment was £1,000, according to the survey. The biggest was awarded by miner Anglo American, which said it handed £2,500 to the lowest 40 per cent of earners in the UK. Harbour Energy, which was nudged out of the FTSE 100 last month, also said UK-based employees would receive £2,500.
Banks were among the FTSE 100 constituents offering lower pay increases.
Barclays offered a £1,200 pay rise, targeted at lower-paid employees, which equated to a salary bump of 4.7-5.5 per cent, while NatWest offered a 4 per cent pay rise for workers earning less than £32,000 per year. Lloyds offered a £1,000 one-off payment in August to 99.5 per cent of staff, excluding senior executives, and an April pay rise of 3.6 per cent.
Supermarkets were more generous, with hourly rates at Tesco increasing by nearly 8 per cent in 2022. At Sainsbury’s, basic pay for 127,000 staff grew by 7.9 per cent.
Other companies said they increased staff pay but did not indicate by how much; these included insurer Admiral and property company British Land.
Glencore, British American Tobacco, DS Smith, National Grid, London Stock Exchange Group and Pearson declined to respond to the FT’s survey. A further 29 failed to respond.
Since the FT’s survey, Harbour Energy, Dechra Pharmaceuticals, and Intermediate Capital Group have been replaced in the FTSE100 by Abrdn, Beazley Group, and Weir Group, which have not been included in the analysis.
