It’s easy to see the contribution of football stars such as Erling Haaland to Manchester City’s success, but the contribution made by top corporate earners is less obvious. Photo / Getty
Sports stars prove their worth with astonishing feats on the pitch. The skills that propel executives up the greasy pole are not so obvious. But a lot rides on a company’s ability to attract talented leaders. Should they be valued just as highly?
Billionaire financier Lord Michael Spencer has weighed
in on the debate, arguing UK companies should be able to pay bosses like “top-rate footballers” without facing a backlash. It is one reason why the UK lags behind other markets such as the US, he says.
The US-UK pay gap is indeed big. American chief executives earn five times as much as their British counterparts – or more than twice as much after adjusting for company size, according to a Schroders study of 2353 chief executives. There is a case for bridging the gap in the case of “Brilo” (“British in listing only”) companies liable to switch listings to the US. Construction equipment rental group Ashtead, which has just announced it is moving its listing from London to New York, faced a battle in the summer over a plan that could have potentially paid chief executive Brendan Horgan $14 million.
But there are many reasons why bosses would be ill-advised to compare themselves with footballers when it comes to pay. For one thing, the comparison might not flatter them. The median FTSE 100 chief executive pay of £4.1m last year was nearly twice that of the average Premier League football player, according to Financial Times research.
For another, corporate executives resemble managers more than players. It is the players who are usually better paid, and extract most of the value. Most Premier League clubs have a wage-to-revenue ratio of more than 70%.
