Executive pay has grown to almost 180 times that of the average worker, from 60 times, since the 1990s, according to a report by British think tank the High Pay Centre.
The U.K. government needs to take more radical action to tackle the inequality gap by forcing firms to cap executive pay at a fixed multiple of their lowest paid employee, the High Pay Centre said in a report published Monday titled 'Reform Agenda: How to make top pay fairer'.
"It's time to get serious about tackling the executive pay racket. The government's tinkering won't bring about a proper change in the U.K.'s pay culture," said High Pay Centre director Deborah Hargreaves.
"We need to build an economy where people are paid fair and sensible amounts of money for the work that they do and the incomes of the super-rich aren't racing away from everybody else," she added.
The report comes after 52 percent of shareholders in British fashion house Burberry last week voted not to support its remuneration report - a rare stand against excessively high salaries. The firm's chief executive Christopher Bailey has a package worth up to £10 million a year.
In October, regulations were introduced in the U.K. to force listed firms to give shareholders a binding vote on directors' pay. Now over 50 percent of shareholders must approve a policy before it is passed.
However, since rule changes were enforced, every vote at a FTSE 100 company has seen the majority of shareholders support the company policy on top pay, with the recent case of Burberry proving the exception.