The excessive City pay culture is seeping into the remuneration packages of charity bosses and should be curbed, Unite, the largest union in the country, has warned.

Unite, which has 60,000 members in the not for profit sector, is concerned that some chief executives are earning more than the Prime Minister’s annual salary of £197,000.

And while chief executive pay soars at a rate of 6% a year, many charity workers are struggling with wages just above the National Minimum Wage (NMW) of £5.80 an hour.

Unite is calling for charities to look closely at the rates of pay of all their employees and to iron out inequalities.

Unite favours flat pay increases for everyone, rather than percentage rises, as this would benefit the lower paid.

Unite is concerned that the growing pay inequalities are a symptom of a ‘greed culture’ across the economy, and would like the proposal for a High Pay Commission to be set up quickly to radically tackle this trend, which is leading to fissures in society.

Unite highlighted the pay of Anchor Trust's Chief Executive, John Belcher, whose pay was £391,000 in 2008/09, while many of his employees, running homes for the elderly, are living on wages just above the NMW. Mr Belcher resigned from his post last week.

Other examples of ‘excess’ include:

• Riverside Housing Group’s highest paid director received (emoluments excluding pension contributions) £231,000 in 2008

• UK Film Council’s Chief Executive Officer received between £205,000 and £210,000 in 2008

• The National Trust in 2009 paid between £160,000 and £169,999 to a top member of staff

• In 2008, Age Concern paid a senior staff member between £100,001 and £120,000

• The RSPB in 2008 rewarded a staff member with emoluments between £100,001 and £110,000.

Rachael Maskell, Unite National Officer, not-for-profit sector, said: ‘It is quite clear that the insidious City culture of excessive pay is seeping into the packages of some not for profit sector chief executives.

‘This is to be deplored as it corrupts the ethos of the voluntary sector and is an insult to those, often on average incomes, who donate to charity. I think the general public will be shocked by the scale of the packages that some executives are being awarded. This sector is losing its sense of what real value is.

‘It has also contributed to great and unfair disparities between the pay of the chief executives and top directors, and other members of staff, as this is being replicated across other sectors of society.

‘It is not right that a charity boss earns much more than the Prime Minister. Flat pay increases of a set amount should be introduced, instead of percentage rises, as this would reduce pay disparities, which is hitting, in particular, women, disabled people, ethnic minorities and part-time workers.’

Maskell made clear that Unite’s fire was directed at the excessive pay packages and not at the majority of charities whose chief executives earn on average £57,000 annually, while those running small charities take home a modest £33,000 a year.