Is the UK losing the boardroom pay race to America?

The gap in pay between boardroom executives in the United States and the United Kingdom's financial services sector has been growing in recent years. In 2023, new research conducted by EY shows that non-executives at North American financial firms earned an average of $334,707 per director, which is 26 percent more than the $266,368 received by their UK counterparts. This widening gap has raised significant concerns regarding the competitive landscape between Wall Street and the City of London, This increase in pay disparity marks a notable shift from previous years. In 2019, the pay gap was only 12 percent, with North American directors earning $302,814 compared to $269,802 held by those in the UK. The increasing discrepancy in boardroom pay has sparked a discussion about the ability of British companies to attract and retain top talent amid growing competition from American firms. Various factors are contributing to this evolving situation, including regulatory environments, corporate governance practices, and overall economic performance. Additionally, as companies in the U.S. continue to pay higher salaries to non-executive directors, this could lead to a further talent drain from the UK, exacerbating the challenges faced by British financial institutions. Overall, the research indicates that Britain is at a disadvantage and may need to reevaluate its approach to corporate compensation in order to remain competitive against the backdrop of an increasingly aggressive U.S. financial market.