BLUE-CHIP companies plan to rein in bonus payouts for their executive staff this year, though bosses can expect to see their pay packets grow in the long run, according to research out today.
One in five FTSE 100 firms expect executive bonuses to fall by at least 10 per cent this year, and 17 per cent will impose a drop of more than a quarter, a PwC survey suggests.
Around half of the FTSE 100 expect bonus payments to be equal to last year, while almost four in 10 are freezing salaries for executive directors in 2013 as they bow to regulatory and shareholder pressure.
And roughly half of the top-flight firms surveyed plan to make changes to their executive pay policies this year, ahead of new rules on binding shareholder votes due in 2014.
“The calls from shareholders for pay and bonus restraint appear to have hit home,” said Tom Gosling, head of PwC’s reward practice.
“Following a number of years in which bonuses had crept up to around 80 per cent of maximum pay on average; we expect them to fall back towards target levels of around 60 per cent of pay this year.”
However, Gosling pointed out that most companies think pay levels have now bottomed out, and many expect to see longer-term rises to ensure top staff stay with the firm.
“Nearly two thirds of companies said the scrutiny on executive pay is making the UK an unattractive location for executives,” he said.