21 Apr, 2017
Executive pay drops as shareholder pressure rises
Pay for chief executives at Britain’s most prominent companies is on the decline, as a fresh wave of shareholder pressure seems to be driving restraint.
Analysis of the first 40 blue-chip businesses to publish their wage reports has revealed that 42.5% of their bosses did not get a pay rise this year.
Consultancy firm PwC examined remuneration documents of the FTSE 100 businesses to get a snapshot of how pay policy is shaping up. The publication found that the median total pay figure, which includes bonusses - for company executives dropped this year by £200,000 to £4.1m, a fall of 4.7%.
An even larger drop was registered for the highest-paid quartile for executives, with total pay packets declining by 13% to £5.7m, something PwC attributed to pressure from investors.
Head of reward at PwC Tom Gosling said: “Companies are under the most intense scrutiny ever on pay decisions, and it's no surprise they are generally showing restraint."
He added: "Pay levels overall remain broadly flat or down in real terms, and pay has fallen sharply at the highest paying companies. This reflects continued shareholder pressure on companies perceived to be outliers on pay.”
The figures, derived from an analysis of remuneration reports of the first 40 FTSE 100 companies with year ends on or after 30 September 2016, also found that rises in basic salary were also waning.
For those chief executives who did get an increase in their basic pay, the size of the rise rested at 2% this time round, down from 3% in the same period last year.
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