Average FTSE 100 chiefs' pay grows by £500k

Andrew Cummings
August 8, 2016

'There is apparently no end yet in sight to the rise and rise of FTSE100 CEO pay packages, ' High Pay Centre director Stefan Stern said.

Meanwhile the Prime Minister, who last month called the gap between top dog and worker pay "irrational, unhealthy and growing", has already pledged various measures to make pay fairer, including forcing companies to make their pay ratios public and making shareholder votes on executive pay binding. The modest increase followed sharp falls in the wake of the financial crisis.

Peter Cheese, from the Chartered Institute of Personnel and Development, said: "There is still a shocking disconnect between pay for those at the top and the rest of the workforce in large companies".

The executive who built WPP from a manufacturer of wire baskets into the world's largest advertising group saw his pay jump from an already controversial £43m in 2014.

The slower growth in median pay suggests that the increases in average pay are driven by big pay increases for a small number of CEOs at the top.

The top 10 highest-paid CEOs in 2015 were from WPP, Berkeley Group, Reckitt Benckiser, Sky, Shire, BP, Relx, Prudential Financial, Schroders and Lloyds Group.

FTSE 100 chief executives' pay rose by a tenth past year to an average of £5.5m, according to a survey that will bolster demands by United Kingdom prime minister Theresa May for top companies to curb excess in the boardroom. But investors have complained of being asked to approve schemes without knowing enough about them.

In April, BP shareholders were furious when the board made a decision to hike Dudley's pay by almost 20%, in a year when the company had run up a $6.5bn loss.

May's proposals, if they are made, represent a culture shift.

The High Pay Centre found that the average pay for a FTSE 100 chief executive was £5.5m in 2015, up 10% from the previous year. Travel firm TUI, which merged with German incorporated TUI AG recently, has an airline pilot and travel agent on its supervisory board.

Travel giant TUI is the only FTSE 100 to have employee representatives on its board, something that May has also advocated and the Pirc spokesperson commented would help "reel in the excessiveness" of boardroom pay. In Germany, worker representation at companies over a certain size is a right.

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