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Analysis by CIPD, the professional association of HR workers, and think tank the High Pay Centre found that average pay for FTSE 100 chief execs fell by 13% last year to £3.4m.
The findings tally with similar research by Deloitte released earlier this week.
However, despite the drop, FTSE 100 bosses still earn more than 100 times the median UK salary, which stands at £29,574.
“The gulf between the pay at the top and the bottom ends of companies is slightly smaller this year but it’s still unacceptably wide and undermines public trust in business,” Peter Cheese, chief executive of the CIPD, said.
“We must question if CEOs are overly focused on financial measures and are being incentivised to keep share prices high, rather than focusing on the long-term health of their business.”
Tim Roache, general secretary of trade union GMB, said the findings were “an absolute scandal.”
“GMB has never been against people getting well paid for doing a good job – but we need a maximum pay ratio enshrined in law to keep our society fair and healthy,” Roache said.
The CIPD and the High Pay Centre called for businesses to go beyond executive pay disclosure and publish figures on the pay for the top 1% of earners in a company. The authors also called for corporate pay setting committees to have more input on how average staff are paid too.
“At a time when we’re struggling to generate economic growth, how pay is distributed between those at the top and everybody else becomes increasingly important,” Luke Hildyard, director of the High Pay Centre, said.
“A slight fall in the pay of FTSE 100 CEOs is welcome and reflects improvements to the governance of the UK’s biggest companies, and a growing recognition of the need to address the rampant economic inequality in the UK.
“At the same time, CEO pay awards and the share of total incomes going to the very richest in society remain very high compared to the level of 20 years ago.”
As well as earning more than the average Brit, FTSE 100 CEOs are also earning huge multiples of what shop floor staff at their companies earn. In most cases bosses earn over 100 times the average salary of their own employees — and in one case almost 1,000 times more.
Jeff Fairburn, the CEO of house builder Persimmon, was the highest paid FTSE 100 boss last year, with a total package worth £38.9m. That was 956 times the annual pay of the average Persimmon employee.
Fairburn’s pay package, which was boosted by awards from a long-term incentive plan, was the subject of controversy last year and he was ousted in November as a result.
43 FTSE 100 CEOs saw their pay increase last year and Shell CEO Ben van Beurden enjoyed the largest pay rise. The oil boss’ take-home rose by 128% to £17.7m. 80% of van Beurden’s pay package is made up of performance-based pay, which helps to explain the large fluctuation.
As well as highlighting the mismatch between CEO pay and average worker take-home, the report also drew attention to the gender pay gap at the top of Britain’s biggest businesses. 6% of FTSE 100 CEOs are women but they account for just 4.2% of the total FTSE 100 CEO pay.
There are also more Stephens or Steves running Britain’s biggest companies than there are women.
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.