DIRECTORS of leading companies have seen their total earnings increase sharply over the last year, according to a report.

Executives at the top 100 listed UK companies now earn 120 times the average sum earned by their employees, Incomes Data Services (IDS) said.

Executive pay has escalated far faster than average pay. In 2000, bosses of top companies earned 47 times more.

IDS said a director now typically earns £2.43m a year. Official figures put the average annual salary at £27,000.

This year bosses' pay rose by more than a fifth, IDS said.

It comes as trade unions call for a 1 per cent pay rise for all NHS staff, which the government has said would cost too much.

IDS said the directors' pay rise was driven by a 44 per cent rise in share awards, which were given as long-term incentives.

Bonuses were also up, by 12 per cent, although basic salaries were £822,300, up by a far more muted 2.5 per cent. That, though, is still some three times the size of average wage rises.

The latest official figures show that, excluding bonuses, average earnings in the May to July period rose by 0.7 per cent from a year earlier; including bonuses, they rose by 0.6 per cent.

Differential

The IDS report shows that the long-term impact of years of high earnings growth has widened the pay differential between FTSE 100 chief executives and the rest of the workforce.

It found that between 2000 and 2014 the median total earnings for FTSE 100 bosses rose by 278 per cent, while the corresponding rise in total earnings for full-time employees was 48 per cent.