The latest boardroom pay survey by Incomes Data Services shows
that the average total earnings of chief executives at the top 100
UK listed companies, the FTSE 100, are now £2.8 million a year.
Chief executive salaries are £730,796 on average, while other
benefits make up the difference.
The Directors' Pay Report analyses the salaries, annual bonus
payments, incentive plans and benefits of more than 1,000 executive
directors at the UK's top 350 listed companies. The survey shows a
fast-growing pay gap between workers and directors.
The report found that directors at the top 350 UK listed
companies saw salaries alone increase by 9.6%, while wage
settlements on average have resulted in pay increases for workers
of 3% on average.
The total remuneration is many times the salary of executives
because it includes the notional gains which executives would earn
from share options at current prices. Not all share options could
be immediately cashed in at current prices.
The research shows that average FTSE 100 chief executive pay
packages jumped by 43% in just one year. They have risen by 102%
since 2000, a period during which average pay packets overall rose
by just 29%. Five chief executives earned pay packets which
exceeded £10 million.
"It is hard not to conclude that this further huge rise in
executive pay is more about greed than performance," said Trades
Union Congress general secretary Brendan Barber. "No one should now
have any illusions that executive remuneration has been brought
under control. Giving shareholders a vote on boardroom pay has
failed to rein in excess, as remuneration committees have simply
found new ways to keep pushing up pay."
"Oscar Wilde may not have had directors’ pay in mind when he
said ‘moderation is a fatal thing … nothing succeeds like excess’,
but given our latest survey it seems like remuneration committees
have acted on his advice," said Steve Tatton, editor of the IDS
Executive Compensation Review.
"The stratospheric levels of directors' pay compared to average
wages mean that executives now live in a class apart, even from
employees in their own companies. It is not just socially divisive,
but bad for the economy," said Barber.
