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Top UK bosses 'see pay rise 32%'
2011-05-30 17:04:36
30 May 2011 Last updated at 13:42 Share this page Delicious Digg Facebook reddit StumbleUpon Twitter Email Print Top UK bosses 'see their pay increase by 32%' The report says pay deals are too short term Continue reading the main story Related Stories HSBC faces investor anger on pay Pay boom for top 0.1% of earners
There is a weakening link between the total pay increases that top UK chief executives receive, and the performance of their firms, a report has claimed.
The study found that while the average remuneration of bosses of companies on the FTSE 100 index rose 32% last year, the index itself increased just 9%.
Report co-author, business consultancy MM&K, said remuneration committees were struggling to stay independent.
It added that pay deals for bosses were too short-term focused.
The report also found that over the past 12 years, some share prices had not increased, but pay deals for chief executives had quadrupled.
While the study welcomed a move towards Long Term Incentive Plans (LTIPS) - linking share bonuses to the long term performance of a company - it said the duration of such schemes had shortened extensively.
Continue reading the main story “Start QuoteMost FTSE 100 companies generate most of their revenue outside the UK. If they're British, that may be true in a cultural sense, but not really in an economic sense.”
End Quote Robert Peston Business editor, BBC NewsRead Robert's blog
It said that many LTIPS schemes now lasted just three years, down from seven to 10 years a decade ago.
The report comes days after HSBC bosses had to face shareholder anger over high executive pay at the bank's annual general meeting.
A fifth of the HSBC shareholders refused to back the bank's remuneration plan for senior staff.
"Shareholders are increasingly looking for more aggressive strategic target setting," said Sarah Wilson, founder of governance agency Manifest, which also co-authored the report.
"There is a level of frustration that remuneration committees are developing a tin ear and don't see high levels of voting dissent as something to be concerned about."