FTSE 100 bosses don’t tend to attract a lot of sympathy from the general populace, what with their seven-figure salary packages. But this should please the tabloids: in 2009, salaries of chief execs at the UK’s biggest public companies rose more slowly than average pay (i.e. for the rest of us) for the first time in a decade. Indeed, PricewaterhouseCoopers’ latest report on executive compensation suggests that the tough economic climate has forced shareholders to exercise restraint when it comes to awarding salary increases and bonuses to their top brass. No bad thing, you might argue…
According to the study, the average executive salary within FTSE 100 companies rose by just 1% last year. And it seems they should have been grateful to get that, since pay among their counterparts at FTSE 250 companies was completely frozen. But at least they had a big, juicy bonus to look forward to, right? Well, not necessarily. The study also found that one in six chief execs of blue-chip companies received no bonus whatsoever, and for those that did, payments were slashed by around 20%. After a rotten year for UK plc, this looks like an indication that boards are doing a better job of linking executive pay to performance – which seems perfectly reasonable to us.
But don’t shed too many tears, because Britain’s top bosses aren’t exactly on the breadline. PwC’s study found that the average salary of a FTSE 100 boss reached £805,000 in 2009, while their average bonus – even after that 20% drop – was £525k. Better than a kick in the teeth. FTSE 250 leaders didn’t fare too badly either: the median salary remained at £425,000, while their bonus was down about 20% to £217k. On the other hand, the value of their long-term stock and options plans (although obviously a bit trickier to calculate) is almost certainly down – by as much as 40% at companies that have experienced hefty share price falls, PwC reckons.
What a difference a year makes. In 2008, the bosses of Britain’s blue-chips saw on average a 6% rise in their salary, compared with a 3.7% rise in the national average. This year it’s 1%, compared to the average of 2.5%. Although the observant among you will be quick to point out that although FTSE bosses are getting smaller wage increases, so are the rest of us. And we were starting from a much lower base…
In today's bulletin:
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Britain's top bosses see pay rise below national average
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