RIES for Britain’s top bosses are rising at below the rate of inflation and bonuses shrank in the last year, hit by the economic slump and tougher scrutiny of executive pay, according to research out today.
The figures from Deloitte show that even FTSE 100 chief executives are feeling the pinch this year, with the median salary rising 2.4 per cent and 46 per cent accepting a base pay freeze this year, up from 21 per cent a year ago.
Bonuses came in at 120 per cent of base pay on average, or 74 per cent of the maximum bonus allowed by each firm, down from 135 per cent.
And behind the figures, boards are introducing tighter criteria for awarding bonuses and two-thirds now have clawback plans in place compared to just 36 per cent a year ago. But Deloitte notes that many companies award bonuses for above-target performance every year, which “suggests a need for a recalibration of bonus targets and expectations”.
A string of high-profile bosses have forgone bonuses this year, including Antonio Horta-Osorio at Lloyds Banking Group, RBS’s Stephen Hester and Bob Diamond formerly of Barclays.
Others came under fire from shareholders for handsome pay packets, including at WPP and Aviva. Overall, however, 62 per cent of the FTSE 100 won more than 90 per cent shareholder support for their remuneration packages, up one percentage point on last year – suggesting the majority of companies managed to avoid an AGM showdown with investors over pay.
Deloitte’s Stephen Cahill said that some of the pay restraint this year can be credited to the so-called shareholder spring, but other factors are at work including the gloomy economic environment and looming rule changes.
“Given the changes to remuneration disclosure and the introduction of a binding vote on remuneration policy, we can safely assume this issue is going to remain at the top of shareholders’ agendas for the foreseeable future,” he said.