British chief executives earn about a third of what their counterparts in the US are paid for doing equivalent jobs, according to academic research published today.
A paper in this month's Economic Journal, by Martin Conyon of the Wharton School in Pennsylvania, and Kevin Murphy of the University of Southern California, shows that even allowing for differences of industry, profitability, business growth and so on, the average US executive earns 45% more than his or her British counterpart in cash terms and 190% more if share options are included.
It is no surprise to find that managers are better paid in the US: in 1997, the average pay of British chief executives at the top 500 companies by market capitalisation was 660,000. The average pay of the top 500 US chief executives was 6.3m (€10.41m).
What is striking about his research is how much better paid US managers are for doing very similar jobs.
In recent years executive pay has risen much more strongly than average earnings in Britain, and there have been renewed suggestions that the Government should do more to tackle fat cat pay.