FTSE 100 director earnings take $133m hit as weak pound bites after the Brexit vote

 
Rebecca Smith
Since the Brexit vote, job moves have been a big topic of conversation in the City
Since the Brexit vote, potential job moves have been a big topic of conversation in the City (Source: Getty)

FTSE 100 directors' earnings have been buffeted by the fall in sterling post-Brexit vote.

According to executive search firm DHR International, directors have lost $133m (£103m) in value from their total remuneration over the past year, with the drop in the pound affecting the competitiveness of their pay packets, when stacked up against their equivalents at overseas firms.

The company added that competitors overseas were eyeing UK-based talent to make use of their "increased buying power".

Read more: Pound below $1.30 after growth UK manufacturing disappoints in June

Looking at company filings of those paid in sterling, DHR International said total FTSE 100 boardroom pay, including the value of share option grants and long-term incentive plans, was $1.14bn in June last year, and $1bn in May 2017.

In the aftermath of the Brexit vote, the pound slumped to a 31-year low.

Frank Smeekes, managing partner for Europe, at DHR International, said:

The average devaluation of board remuneration at FTSE 100 companies since Brexit is north of $1.6m. That loss in value is hard to ignore.

In recent months, we have noticed that some executives are now more open to having a conversation with foreign companies, who are looking to utilise their increased buying power.

Smeekes added that during bonus season, DHR noted several major US banks paid their British staff "higher bonuses in sterling without incurring any extra costs on their balance sheet".

"As a result, US banks look like the better-paying employers, which helps them with their recruitment," he said.

While some UK firms will structure their pay in dollars on euros, so insulating their execs from the fall in sterling, DHR said the typical UK domiciled company "will struggle to make good the loss in value from currency changes".

Read more: Brexodus? One year on, what banks have said about Brexit and job moves

 

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