OK, so the economy is technically out of recession - but we're by no means out of the woods yet. So it seems odd, to say the least, that bonuses have already reverted back to pre-crash norms. In fact, in the FTSE 100’s top 30 firms, bonuses apparently soared to 140% of directors’ salaries – which does rather support Delotte’s suggestion that the performance hurdles were set too low.
Among the top earners were BG Group CEO Frank Chapman, who earned £28m in 2009-10, and Reckitt Benckiser chief Bart Becht, who took home £93m. At a time when most people are seeing their salaries flat-line, we're reminded of CBI chief Richard Lambert's view that numbers like these put top execs at risk of seeming like ‘aliens from a different galaxy’. Particularly considering Becht heads up the company responsible for creating shouty Cillit Bang enthusiast Barry Scott.
To be fair, things aren't looking quite so rosy lower down the FTSE 500. One in seven FTSE 250 companies haven’t paid any bonuses at all this year, while half say they’re not planning to increase the pay of their executive directors this year. The average pay increase is expected to be a relatively modest (though possibly above-inflation) 3%.
But it's those headline figures that will grab attention. And to make matters worse, it looks like the banks could be big bonus payers again in 2011; the Treasury admitted new laws forcing the City to disclose any employee getting a £1m+ bonus will not be on the statute books in time for next year's bonus season. So don’t be surprised if the banks fork out while the going's good next spring.
Paying bonuses is an important part of attraction and retention. And CEOs who lead their business through difficult times are worth their weight in gold. But there has to be a sense that bonuses only reward out-performance, as opposed to racking up even when times are bad. These figures suggest our biggest companies still haven't got that balance right.