Austerity, what austerity? Executive pay jumps by 55%
Friday, 29 October 2010 12:00 AM
By Peter Wozniak
As the country prepares to endure tough spending cuts, a report today confirmed a 55% jump in pay for FTSE 100 executives in the past year.
The Income Data Services (IDS) report revealed the average pay for chief executives of FTSE 100 companies was £4.9 million.
Basic salary has climbed slowly, meaning most of the increases come from bonuses and top-up payments.
According to the survey, the highest earner in the business world is Bart Becht of consumer goods company Reckitt Benckiser, who received total remuneration of £92.6 million last year.
Curiously, some of the highest pay awards are in companies lower down the table of the FTSE 350.
The news comes days after the business secretary Vince Cable set out government plans for pay discipline in the private sector.
Mr Cable said the report was "further evidence that it is time for executive pay to come back down to earth.
"We have to question whether it is linked closely enough to company performance. I'm determined to take a really close look at these important issues and want to see a wide response from industry to my review."
Unions claimed the report demonstrated executive pay was completely out of touch with reality in an atmosphere where public services were about to suffer extreme cutbacks.
TUC general secretary Brendan Barber asked: "Don't they know that this is meant to be austerity Britain? These mega-pay rises blow away any claim that we are all in this together.
"While the poor and those on middle incomes lose out from cuts and pay squeezes, top directors continue to take home telephone number salaries without being overly troubled by tax.
"It is time government and shareholders got together to identify how to address this wasteful spending and inefficiency in our biggest companies."
The IDS report suggests executive remuneration is back to levels seen before the financial crisis. The same report last year showed a mild drop in CEO pay at the height of the recession.
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