Pandemic support was presented as protection for jobs and livelihoods. But in the UK’s biggest listed companies, furlough support was associated with higher executive pay soon afterward. The study examines how senior executives at the UK’s largest publicly listed companies financially benefited from the Coronavirus Job Retention Scheme, or CJRS.

It uses a difference-in-differences research design to analyse the impact of CJRS participation on executive remuneration between 2019 and 2023. Across 246 FTSE 350 firms, receipt of furlough support in 2020 was associated with significant increases in CEO performance pay and total remuneration in the immediate post-pandemic year.

The results are interpreted through elite welfare: elite income derived from rent extraction facilitated by public policy or expenditure. Unlike conventional welfare, elite welfare accrues to a small minority in privileged positions, and recognising it as a parallel welfare system offers a new perspective on inequality and public policy.

UK Government support to business during the COVID-19 pandemic was justified through common interests, including protecting jobs and livelihoods. It was also justified as a way to ease the financial burden for businesses and the UK population.

But these indefinite, universal goals potentially gloss over deeper questions about monetary and in-kind support. The question matters because some schemes offered relatively weak protections to workers, while others baked existing inequalities between participants into the support.

The CJRS covered 80 per cent of wages, up to a gross cap of two thousand five hundred pounds a month. Low-paid, part-time, and young workers were significantly more likely to be furloughed with reduced pay; in April 2020, more than half of employees in the lowest decile of hourly earnings were on furlough with reduced pay.

In that same month, one point three million furloughed employees were paid below the minimum wage, including a third of people working in the accommodation and food sector. By contrast, government-supported loan schemes awarded millions of pounds to major banks while creating debt servitude for many smaller businesses and their employees.

Examining how government support to business benefited senior executives in larger companies is a key question that has largely been ignored in public debates. This reflects a general disinterest in corporate welfare in social policy scholarship, first noted by Farnsworth in 2012 and still present today.

Research on corporate welfare also primarily treats the corporation as its unit of analysis, rather than examining the beneficiaries positioned to extract value. The omission directs attention to how corporate welfare can support the welfare of elites and affect economic justice and inequalities.

Elite welfare is defined as elite income generated through activities, opportunities, and relationships that are largely free from competitive restraints. This income is either unmoored from value-producing activities or derived from assets that are scarce or artificially made scarce.

Elite welfare is directly or indirectly facilitated by policy decision-making or public expenditure, whether by design, tolerated omission, or unintended effect. The concept is a kissing cousin of middle-class advantage in public service provision, but it raises qualitatively different issues.

Elite welfare is a form of welfare by other means, understood through how elites are positioned in relation to the allocation of capital characteristic of rent. It depends on a different form of privilege: corporate executives who derive windfall benefits from corporate welfare do not need to act or compete in a field shared with the hoi polloi.

There is no struggle and no requirement to leverage social or cultural capital. Advantage accrues by virtue of just being there: in the right role, in the right place, at the right time. The study does two things: it examines the relationship between CJRS grants received by the UK’s largest publicly owned companies and changes in executive pay.

It estimates difference-in-differences regression models to test whether CJRS grants affected changes in executive pay before and after the height of the pandemic. The study finds that receipt of furlough support had a significant positive short-term impact on executive pay.

It then explains the findings using elite welfare, tying the phenomenon to rent and to policy-enabled rent capture. The sample contains 246 companies based on the FTSE 350 as of 31 December 2021, with data on executive pay published consistently from March 2019.

The 104 excluded companies lacked firm financial data for at least a year before March 2020 or did not report executive remuneration data consistently after March 2019. The data were collated between January 2021 and April 2024 and cover CEO and CFO remuneration, government funds received to support furlough, and firm financial data.

Pay data for CEOs, CFOs, or equivalents between 2015–16 and 2023–24 came from directors’ remuneration reports in company annual reports. The reports include total pay and components such as basic salary and fees, taxable benefits, person-related benefits, annual bonuses, and long-term incentive awards.

The researchers also collated other payments, employee share plans, initial public offering awards, malus, and clawback. Changes in directors and their appointment dates were recorded, and pay was recalibrated when directors moved between roles according to days in office.

Figure 1 shows trends in average total remuneration paid to CEOs and CFOs between 2015–16 and 2023–24. Before the pandemic, executive pay had been falling from a 2017–18 peak of three point five four million pounds for CEOs and one point nine four million pounds for CFOs.

Between 2018–19 and 2019–20, average total pay fell from three point two eight million pounds and one point seven eight million pounds to two point nine five million and one point five eight million. It then fell sharply in 2020–21 to two point three seven million pounds for CEOs and one point two seven million for CFOs, before recovering quickly as the economy came out of lockdown.

By 2023–24, pay had levelled off at three point four four million pounds for CEOs and one point eight two million for CFOs, comparable to its pre-pandemic peak. The blue CEO curve and pink CFO curve both dip inside the shaded pandemic-support interval, with the CEO series showing the wider vertical movement.

Afterward, both curves rise, while the shaded bands around them indicate substantial variation across firms rather than a single uniform pay path. CJRS support data were first obtained from group consolidated financial statements, using terms associated with furlough and government support, such as grant.

When support was not sufficiently disaggregated or was ambiguous in consolidated financial statements, the researchers searched first-tier UK. The direct beneficiaries of the CJRS were furloughed employees, who were protected from being laid off for the duration of the scheme.

The scheme also benefited participating businesses by helping them avoid redundancy costs, including redundancy payments, rehiring, induction and training, higher staff turnover, and lower productivity. In 2009, the Chartered Institute of Personnel and Development estimated the average direct cost to employers of making redundancies at sixteen thousand three hundred and seventy-five pounds.

Table 1 shows firms in broad industry groupings that did and did not receive CJRS funds during the pandemic. Fifty-six of the 246 firms received support solely in 2020, while a further 35 received support in both 2020 and 2021. Overall, 37 per cent of firms, or 91 firms, reported receiving support at the peak of the pandemic in 2020.

Industrial, finance and real estate, and information and technology companies were mostly supported in 2020 only, while service firms mostly received support in both 2020 and 2021. Look across the industry rows: the industry category has twenty-one firms in the “twenty-twenty only” column and ten in “twenty-twenty and twenty-twenty-one,” while retail and accommodation shows eleven and ten.

The finance and real-estate row is the only one with zero firms in the two-year column. To identify an effect of furlough support on executive remuneration, the study employs a difference-in-differences regression research design.

The approach observes companies that received furlough support and companies that did not, before support was available and after receipt of support. It estimates the difference in remuneration before and after support, and then identifies the difference in that difference between supported and unsupported companies.

A key assumption is that remuneration trends before the intervention are parallel for treated and untreated groups; the analysis found no significant divergence before the pandemic. The first national lockdown and the introduction of furlough both took effect toward the end of March 2020.

The pre-support period was the twelve months from 1 April 2019 through 31 March 2020. The study analysed change from 2019–20 to 2021–22 and, separately, from 2019–20 to 2022–23. These periods allow the study to consider whether effects were sustained or delayed.

The dependent variables measure CEO and CFO remuneration separately, including total pay, basic salary, pension, performance pay, benefits, and other payments. Table 2 reports average remuneration in 2019–20, the pre-support period, and in 2021–22 and 2022–23.

Average total remuneration for both CEOs and CFOs increased between 2019–20 and 2021–22, and increased further between 2019–20 and 2022–23. The increase was mainly concentrated in performance-related pay. The fixed-effects difference-in-differences models include the post-support period, whether a company received furlough support, and an interaction between period and receipt of support.

That interaction provides an estimate of the difference-in-differences effect of receiving support. Firms receiving support are split into groups based on whether they received furlough support over one year or two years, so the study uses a generalised difference-in-differences approach.

The models control for employees, log of sales, return on assets, leverage ratio, and whether executive roles changed during the period. Figure 2 shows difference-in-difference coefficients with 95 per cent confidence intervals for change between 2019–20 and 2021–22. The upper panel shows CEO remuneration models, and the lower panel shows CFO remuneration models.

For CEOs in firms receiving furlough support in 2020 only, the results showed a positive significant difference. In the CEO panel, the performance-pay estimate in the 2020-only column sits furthest to the right, while its interval remains entirely on the positive side of the zero line.

In contrast, the CFO panel’s clearest departure appears for basic salary under furlough in 2020 and 2021, with the point estimate just above zero and a comparatively tight interval. For CFOs, no significant effects were found for any remuneration component linked to receipt of furlough support in 2020 only.

There was, however, a significant positive effect on basic salary for CFOs in firms receiving furlough support in both 2020 and 2021. There was a substantial increase in performance-related pay in 2021–22 compared with 2019–20, especially for CEOs, and this almost entirely accounted for the increase in total remuneration.

CEOs in firms receiving furlough support in 2020–21 received a significantly higher increase in performance pay after support than CEOs in firms that did not receive furlough support. Look specifically at the CFO pension and benefits row: the average is zero point sixteen million pounds in both 2019–20 and 2021–22, then zero point fifteen million in 2022–23.

The corresponding change columns report zero point zero zero and minus zero point zero one million pounds. A second set of models tested change between 2019–20 and 2022–23 to examine whether effects were sustained into a second year or were delayed.

Overall, no statistically significant effects of receiving support were found in this later period. The effects were therefore limited to the year immediately following the introduction of support, with no delayed effects, including among firms receiving support for two years.

Elite welfare creates a conceptual bridge between income derived from rent and elite wealth and privilege, covering practices that invert the redistributive norm commonly associated with welfare. It treats state-enabled rent extraction as a form of social support for political and economic elites and creates a new terrain for examining governments’ dual role in managing precarity and privilege.

The concept opens questions about elite capital, allocative inefficiencies in public policy and spending, and economic inequalities. It also raises questions about conditionality, elite fortunes, rentierisation, public spending, and whether elite welfare weakens the state’s capacity to meet broader citizen needs.

Elite welfare provides an analytically bounded space for understanding how governance can bring together otherwise unconnected practices that lock in and compound wealth and income inequalities. The study links furlough support to a short-term rise in CEO performance pay and total remuneration, then uses elite welfare to describe how public policy can create benefits for privileged insiders.