Salaries of top FTSE executives continue to rise
The average basic salary of chief executives in the top 30 FTSE 100 companies was 600,000 (€969,000) last year, rising to just over 800,000 at the median when including their annual bonus payments, according to the report.
The median basic salary for chief executives in parent companies was 394,400, compared to 380,000 for the previous year. Chief executives' counterparts in subsidiaries earned an average of 150,000, compared to 100,000 the year before. This was 8% up on last year, compared to just 6.2% in 1999.
Andy Christie, a senior consultant at New Bridge Street Consultants, one of the survey's sponsors, said: "This figure is up on last year and up on national average earnings figures, at a time when companies still get a lot of flak about excessive executive remuneration."
Christie said that companies might increasingly struggle justifying executives' rising pay as the market downturn continues. "As the market tightens competition for really good people increases, which puts pressure on basic salaries. On the one hand shareholders try to control what they consider to be the excesses of remuneration, but companies are looking at supply and demand and at retaining people," he said.
In addition, 97% of companies said they planned to award bonuses in the future, and only 13% said the bonus would be pensionable. Bonus deferrals remain relatively rare. In 69% of cases no bonus was referred, compared to 78% last year. The average bonus awarded to all executives last year was 24% of basic salary, or about 49,700.
The survey uses data from 27% of the FTSE 100 companies and 13% of the Mid 250. In total 95 companies, 81 parent groups and 137 subsidiaries gave data on 1,457 executives. The other survey sponsors were consultancy firms Bacon & Woodrow, Deloitte & Touche and SCA Consulting.
A report out last week by Co-operative Insurance Society said that 60% of FTSE 100 companies did not follow best practice over control and monitoring of directors' pay and bonuses.
The survey found that 60% of FTSE 100 companies have directors on the remuneration committees that are not independent as set out in the corporate governance standards of the Association of British Insurers and the National Association of Pension Funds. The industry groups' combined code says that directors' pay should be controlled by a remuneration committee of independent non-executive directors.
