Has the pay of the head of Barclays gone up 500 times since 1979?
"If you look at the way teachers' salaries have been increased, since 1979 they've gone up 5 times. But if you look at the salary of the head of Barclays, his salary has gone up 500 times."
Emily Thornberry MP, Question Time, BBC2
On Question Time on Thursday, Emily Thornberry MP claimed that while the salary of a teacher has increased by 5 in the past three decades, the salary of the head of Barclays has increased by 500 times over the same period.
The claim was made in response to a question about bonuses for directors and whether the remuneration is earned if a bank makes a loss.
Analysis
Towards the end of last year the High Pay Commission released a report which compared the pay of directors for selected UK companies, sourced from Income Data Services research. According to the figures, the Barclays Director was paid £87,323 in 1979.
In 2011, this figure was £4,365,636, an increase of nearly 50 times. Clearly this is an order of magnitude lower than the increase cited by Emily Thornberry.
There are however three important caveats to this figure. Firstly, the data used by the High Pay Commission refers to the total take-home pay including any bonus, not just salary alone.
Full Fact also contacted the High Pay Centre (who ran the Commission), who confirmed that the 'Director' whose remuneration package was examined for the latest set of figures was the former CEO John Varley, rather than the current CEO Bob Diamond.
Finally, it should be noted that this increase is in absolute pay and does not take into account inflation. Taking into account inflation, the £87,323 earnings in 1979 would be equivalent to £226,778 today. This means that excluding inflation, the increase has been 19.25 times the value of remuneration of 1979.
The most recent Barclays Annual Report lists Mr Diamond's total remuneration for 2010 as £6.75 million, which would be 77.3 times the sum taken home by the firm's Director in 1979. Taking into account inflation, this is an increase of 29.8 times.
The High Pay Commission also gives figures for increases in the average teacher's salary. According to its figures, the average teacher earned £6,474 in 1979 (equivalent to £16,813 today) and £25,900 in 2011 — an increase of 4 times (or 1.54 times taking into account inflation).
However these are not the only figures that we can use to compare increases in teachers' salaries. A parliamentary answer given in 2001 by Alan Johnson gives the average salary in England and Wales for a full time secondary school teacher in 1979 as £5,180 (equivalent to £13,452 today). The School Workforce Census revealed the average pay for a secondary school teacher in 2009 was £33,700 — an increase of 6.5 times.
Full Fact has contacted Emily Thornberry's office to check whether there is an alternative source for her claim, and will update this post when we have more information.
Conclusion
Using the data from the High Pay Commission report, it appears the pay of a director of Barclays has increased by 50 times, not 500. The figure is also for total pay rather than salary, does not take into account inflation, and applies to the former CEO John Varley rather than the current head of Barlcays.
Using the most recent figure for current CEO Bob Diamond's remuneration, we can identify a maximum increase of 77.3 times - still well short of the figure given by Ms Thornberry. Indeed working backwards from Mr Diamond's remuneration package, we calculate that the head of Barclays in 1979 would need to earn less than £14,000 for the Labour MP's claim to ring true.
The exact figure for a teacher's salary varies depending on the source, although appears to have increased by between 4 and 6.5 times since 1979.