FTSE bosses' average pay hits £4.8m

Tuesday 12 June 2012 12.56
Pay packets for FTSE company bosses up 12% last year
Pay packets for FTSE company bosses up 12% last year

The row over bosses pay in the UK was reignited after it emerged that rewards for blue-chip bosses rose 12% to an average of £4.8m sterling last year.

The remuneration for chief executives in 2011 far outweighed the 1% average rise for their employees.

It came despite a 5% fall in the FTSE 100 Index, according to a report by proxy voting agency Manifest and remuneration consultancy MM&K.

A quarter of bosses enjoyed a hike of over 41%, with Barclays boss Bob Diamond the top earner after securing total remuneration of nearly £21m. 

The findings will fan the flames over executive pay following the ''Shareholder Spring'', which has already seen numerous rebellions over remuneration plans.

UK Business Secretary Vince Cable is currently drawing up plans to give greater power to shareholders but is understood to be considering watering down proposals for a binding annual vote in favour of a poll every three years.

The report revealed that basic salaries of FTSE 100 chiefs rose 2.5% but total earnings were boosted by deferred bonuses and long-term awards.

The £4.8m average total remuneration is roughly 200 times the typical £24,000 private sector wage. The average increase in take-home pay for chief executives was 10% to £3.7m.

Shareholder pressure has already claimed several scalps so far this year, including Aviva's Andrew Moss and AstraZeneca's David Brennan.

However, the growth of top bosses' pay will add weight to calls for more to be done to empower shareholders, whose votes are currently only advisory and can be ignored by companies.

Manifest chief executive Sarah Wilson said: "Remuneration committees need more support from shareholders in order to control management's requests for greater and greater rewards."

Cliff Weight, a director at MM&K, said directors' remuneration at the very largest companies is only a small percentage of profits and there is little to stop more increases.

The survey comes the day after it emerged that the boss of Thames Water was awarded a bonus nearly equal to his annual salary after a year in which a hosepipe ban was announced and customer satisfaction "deteriorated".

Chief executive Martin Baggs was awarded an annual bonus of £418,359 for the year to March 31 on top of his £425,000 salary, according to the company's annual report.

The top 10 highest rewarded bosses in the FTSE 100 Index were:

- Bob Diamond (Barclays) - £21m

- Martin Sorrell (WPP) - £11.6m

- David Brennan (AstraZeneca) - £11.3m

- Andrew Witty (GlaxoSmithKline) - £10.7m

- Marius Kloppers (BHP Billiton) - £9.8m

- Peter Voser (Shell) - £9.7m

- Frank Chapman (BG) - £9.6m

- Michael Spencer (ICAP) - £9.4

- Samir Brikho (Amec) - £9m

- Marjorie Scardino (Pearson) - £9m