‘Fat Cat Tax’: Make companies pay for extreme inequalities

This year, the average FTSE100 CEO took less than three days to earn what the typical UK worker will in all of 2026. In the case of Melrose, where the CEO earned 1509 times the median UK salary, it will take him just under 3 hours to do so. These disparities come in a context of long-term wage stagnation, falling living standards and a significant decline in worker trust in their employers.  

It is clear that increased transparency has failed to keep extreme executive pay in check, with pay at the top of the corporate ladder having reached a record level for the third year in a row. To prevent such rampant inequalities developing further, companies should face a greater tax burden if they wish to pay their executives such exorbitant fees.  

The ‘Fat Cat Tax’ 

This is why we are proposing a new ‘Fat Cat Tax’, whereby firms would pay a corporation tax surcharge on their yearly profits if single-figure remuneration for an executive director exceeds a specified multiple of the median UK worker’s salary. This would be a progressive system, starting with a small tax on those pay packages that exceed 10:1, before increasing in size at thresholds of 50:1, 100:1, 200:1 and 500:1.  

Not only would this incentivise firms to scale back the levels of corporate wealth flowing to a small handful of individuals, but also raise funds to be invested in education and early years provision, helping to tackle inequality at source. While companies would not be prevented from continuing to pay sizeable fees to their leaders, increased tax receipts would help ensure that there is a shared societal benefit to such a model if it persists. 

Why is this important? 

The UK has some of the worst levels of income inequality in Europe. Not only do vast pay gaps have detrimental effects on the economy, but also societally through damaging health consequences, reduced workplace satisfaction and increased support for populist politics. Polling by the High Pay Centre and Survation demonstrates that 63% of people believe CEOs should not earn more than 10 times their low- and mid-level employees, reflecting the widespread support for an approach that seeks to reduce such gaps. 

The tax could incentivise wage growth at the bottom, rein in excessive compensation at the top and help rebuild a model of fairness in how corporate wealth is distributed. 

Next Steps 

This petition will show strong public demand for reform. We will share it with government officials, MPs, business leaders, and campaign allies to help build pressure for meaningful change. The petition aims to keep pay inequality high on the political agenda and help generate momentum for stronger action.