Directors of FTSE 100 companies pocketed 49-% cent pay rise in 2010: survey
28 Oct 2011
The directors of Britain's largest companies were slammed for pocketing a 49-per cent pay rise in the past year, even as the average worker failed to keep up with the inflation.
Unions were furious following publication of figures that showed how boardroom pay had soared in the last financial year, as salaries rose and bonuses swelled the value of directors' long-term share plans.
According to the statistics compiled by Incomes Data Services, an annual snapshot of executive remuneration, as reported in companies' most recent reports to shareholders, showed that chief executives of the FTSE 100 largest companies earned an average of £3,855,172 last year. This amounted to an average 43 per cent increase and, factoring in other directors, total earnings were up an average 49 per cent.
The report said, the FTSE 100 chief executive with the highest earnings last year was Michael Davis of the mining conglomerate Xstrata, Davis took a pay of £18.4 million, with Bart Becht of Reckitt Benckiser coming in a close second. Reckitt Benckiser makes Nurofen, Calgon dishwasher powder and Durex condoms.
According to Steve Tatton, the report's editor, the large increases pointed to the rising value of long-term share incentive plans, which were accumulated over time.
He said though Britain's economy might be struggling to return to pre-recession levels of output, the same could not be said of FTSE 100 directors' remuneration. He added, the generous remuneration packages that FTSE 100 directors now received indicated a marked improvement in boardroom fortunes.
Meanwhile, a second IDS report stoked the outrage of union leaders. The report showed that the average private-sector pay award this summer gave workers a raise of just 2.6 per cent which amounted to only half the most recent annual inflation figure.
According to Paul Kenny, general secretary of the GMB, this was another shining example of how the elite greedy pigs who ran the top companies behaved. GMB recently published a survey of 294 occupations that showed except for FTSE directors, everyone from plasterers to IT specialists, travel agents, to midwives and hair dressers to police inspectors had seen the value of their earnings go down. He added that it had got a lost worse in the past year as recovery stalled.
According to analysts the IDS report would reignite demands for curbs on executive pay by government and the Unite union last night called for shareholders to be given additional powers to hold directors accountable.
Meanwhile, the Trade Union Congress (TUC) has called for worker representation on company boards to bring about a narrowing of the gap between boardroom and shop-floor pay.
According to Brendan Barber, the TUC's general secretary, top directors had used tough business conditions to impose real wage cuts, which had hit people's living standards and the wider economy, but had shown no such restraint with their own pay. He added that reform needed to start with employee representation which would bring a sense of reality in the boardroom.
The top earning chief executives of FTSE companies are:
- Mick Davis (Xstrata) £18,426,105
- Bart Becht (Reckitt Benkiser) £17,879,000
- Michael Spencer (ICAP) £13,419,619
- Sir Terry Leahy(Tesco) £12,038,303
- Tom Albanese (Rio Tinto) £11,623,162
- Sir Martin Sorrell (WPP Group) £8,949,985
- Todd Kozel (Gulf Keystone Petroleum) £8,913,223
- Don Robert (Experian) £8,601,984
- Edward Bonham Carter (Jupiter Fund Management) £8,003,641
- Dame Marjorie Scardino (Pearson) £8,003,641
