Executive pay increases despite attempt at regulation
Hywel Roberts, June 02, 2014
Remuneration packages for city executives are continuing to rise despite regulation to curb pay awards, according to a report by the High Pay Centre.
The report analysed pay awards from two-thirds of the FTSE 100 companies in the UK.
It found that average pay for top executives was £4.5 million in 2013, up from £4.3 million in 2012. This is despite legislation giving shareholders more power in deciding remuneration coming into effect in last October.
This spring both Barclays and RBS faced problems at their AGMs, with significant shareholder rebellion over their remuneration deals for executives. This followed a warning from business secretary Vince Cable, who said intervention was “inevitable” if FTSE companies failed to show restraint in their executive pay strategies.
On the back of this, total pay packages for executives have decreased in just over half of the FTSE 100 companies, but soaring rewards in others mean the average has still increased. The top earner for 2013 was WPP CEO Martin Sorrell, whose total package reached almost £30 million.
High Pay Centre director Deborah Hargreaves highlighted the widening gap between the pay for companies’ executives and that of their workers.
“Over the past 15 years, pay for a FTSE 100 CEO has gone from being 60 times the average UK worker to 160 times, without any justification,” she said. “Our economy cannot succeed in the long-term if a tiny group at the top pull further and further away from everybody else.”