Everyone deserves a decent income and to be treated fairly. Yet pay inequality in food companies is rife. The stark contrast between large CEO pay brackets and the low pay and insecure work experienced by much of the sector is staggering. No more pay rackets. Instead, we should bring in a way to ratchet down what top earners receive – and pay everyone a real living wage too.
Recent numbers have shown pay to be rising at the fastest rate for 20 years, but this is not necessarily cause for celebration. Pay increases are still not meeting ballooning inflation; when adjusted for rising prices, wages are still falling. People are still struggling to make ends meet. Inequality is on the agenda for a week, at least, in light of the recent World Economic Forum meeting at Davos. Oxfam called for the super-rich to receive a windfall tax, while also calling out food and energy companies for doubling profits last year, at a time when so many are going hungry and cold.
We should value all contributions to the sector more equally. From manual labour and customer service to marketing and strategic thinking, every employee brings a different skill and ensures the wheel keeps turning. Experience and responsibility can equate with higher pay. However, nobody should earn several hundred times what a colleague in the same office, factory or store gets.
There are seven food companies listed on High Pay Centre’s UK pay database with accounts published in 2022: Cranswick, Greggs, Hilton Food Group, Premier Foods, Sainsbury’s, Tate & Lyle and Tesco. The combined CEO salaries plus bonuses and benefits of just seven individuals was over £20m.
At Tesco, the CEO earned 224 times that of the median employee. Put that in more familiar terms: for every kilogram bag of sugar the CEO earned, the average employee got less than one teaspoon. Talking of sugar, the least unequal of the seven food companies on the 2022 database was Tate & Lyle, albeit still a ratio of 25.
There is little justification for these astronomical salaries. Many CEOs will claim they are just falling in line with others in the sector to stay competitive, but this is not good enough. Those living in poverty are experiencing the real, lived consequences of this concentration of wealth.
Hark back to the days where wages were exchanged by hand, in coins and paper. Imagine if there were no invisible transactions allowing your pay package to land covertly in your bank account. What if all employees – including top earners – had to physically queue up in the canteen and wait in turn to be handed their wage, in the form of a pile of coins, so receiving pay was a visible, tangible act? Would executives feel embarrassed?
If so – and I imagine the majority would – then they should rethink their organisation’s pay structure. Technology and a lack of transparency allow us to avoid confronting these stark, grossly unfair pay differentials.
I’d like to see a pay differential ratchet. Establish a maximum ratio of highest earner to lowest earner of, say, 7:1 by 2030. This target could be reached gradually. Start with 75:1 in 2024, ratchet that down to 50:1 in 2025, then reduce that by 10 every year until you get to a ratio of 10:1 in 2029 and ultimately 7:1 in 2030. Ideally, we’d have bold legislation moving us in that direction. Until then, if you’re a food company owner or director, I urge you to adopt a pay differential ratchet. This will not solve inequality, but it will help. Why can’t food companies take the lead?
Executive pay is like the elevator in Charlie and the Chocolate Factory, rising at uncontrollable speeds and shooting through the factory roof. Raise the floor and lower the ceiling when it comes to pay in your business.
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