· 1 min read · News

FTSE 100 firms curb executives' pay and bonuses


Bonus payouts for the UK's top executives dropped in the past year as companies continued to show financial restraint.

According to research published by professional services firm EY bonus payments for FTSE 100 CEOs decreased by 5.2% in 2012/13, compared to the previous financial year.

The EY study, Into the light, found the continued impact of the 'shareholder spring' in 2012 is one of the reasons for the cautious approach by the UK's top companies.

EY said "significant" progress has been made among the FTSE 100 companies, which has led the change in pay policy disclosures to help better demonstrate the linkage between pay and sustainable, long-term business performance.

The study found FTSE 250 CEOs had their bonuses marginally improved over the same period, with an increase of 0.3%.

EY head of executive compensation and reward Mark Shelton said last year was characterised by a shift in an approach to executive pay and remuneration by businesses.

"Greater scrutiny from institutional investors and the introduction of new legislation in remuneration disclosures, coupled with continued economic uncertainty, has led to a climate of restraint," Shelton said.

Shelton said this approach to bonuses and pay will continue in 2014 and has provided employers with a "real opportunity" to change business practices.

"In order to truly drive sustainable business performance an effective pay programme needs to be tailored to the organisation, rather than simply aligned with the industry norm," said Shelton.