Britain’s chief executives are wildly overpaid, and there would be no negative impact on the economy if their salaries were slashed, a groundbreaking study of the country’s top headhunters reveals.

The London School of Economics report is a damning indictment of the state of executive pay, and comes as an analysis of FTSE 100 company accounts shows that the average pay package of a top CEO is now £4.6m a year.

Interviews with the top 10 international recruitment firms behind 70-90% of chief executive appointments in recent years found a consensus among so-called corporate kingmakers that levels of remuneration for the most senior executives are “absurdly high”.

Headhunters claimed that, for every appointment of a CEO, another 100 people could have filled the role just as ably, and that many chosen for top jobs were “mediocre”.

The market for executive jobs, however, has become so distorted that it would amount to career suicide for a chief executive to indicate that he or she would be willing to work for less.

The study’s authors write: “If one were to offer to do the job for less, would that tip the decision in his or her favour? All the headhunters agreed that this would be a poor strategy.

“Indeed, it might be that asking for a larger remuneration would have a positive effect in securing the appointment.”

They go on: “There was almost universal agreement among the search firms that levels of remuneration for CEOs in large UK non-financial firms was absurdly high. All the interviews supported the notion of an arbitrary norm for pay, which almost all firms felt was grossly and inappropriately high … The general view of search firms is that a lower norm would not materially affect what happens.”

One headhunter said: “I think there are an awful lot of FTSE 100 CEOs who are pretty mediocre.” Another added: “I think that the wage drift over the past 10 years, or the salary drift, has been inexcusable, incomprehensible, and it is very serious for the social fabric of the country.”

The findings are being made public just as an analysis by the High Pay Centre thinktank shows that the average pay of a chief executive – including pensions, share options and bonuses – stands at about £4.6m. The thinktank analysed the figures of the 32 FTSE 100 firms to have filed accounts for 2015. Amid concerns that executive pay in Britain is now hundreds of times that of the average employee of a firm, extreme examples of remuneration emerged.

Morrisons’ CEO Dalton Philips nearly doubled his remuneration to £2.1m in the year before he was sacked, while Tesco boss Dave Lewis received £4.1m – nearly three times the amount paid to his predecessor.

The figures reported in company accounts – as required under guidelines established in 2013 to make pay comparisons easier – could even understate the level of pay given the unpredictability of bonuses.

Max Steuer, reader emeritus at the LSE and author of the new research paper, Headhunter Methods for CEO Selection, published in the Journal of General Management, said there was little evidence that lower pay would see a “brain drain”, as has been suggested.

“In Denmark and other continental countries, the CEOs don’t get this high pay but they don’t seem to leave. The idea that if their pay were lower, British executives could show up in New York and say we would like to have your jobs, is a little implausible. I think the best way of thinking about it is that performance plays very little role in the selection process. Contrary to people saying these chief executives are ‘unusually able’, we don’t find any evidence of that.

“I am a great defender of capitalism and the market and what worries me about all this is that it threatens to erode the market.”

Stefan Stern, director of the High Pay Centre, said there was a systemic problem in executive pay, which may be resolved through greater involvement of employee representatives in the remuneration process.

“There is much less of a ‘global market’ than people claim. The problem here is really systemic. It’s not just the headhunters’ fault. Institutional investors, company remuneration committees, pay consultancies and CEOs themselves could all show greater restraint.

“Having employee representatives involved in this process could help. Some top bosses, it seems, are keen to manage all their costs – except the cost of employing them.”