CEO salaries continue to increase despite slowdown

Increases in chief executives’ basic salaries have slowed down, but they are
still rising at more than three times the rate of inflation for CEOs in the
FTSE 100.

Watson Wyatt’s Executive Reward Survey 2003 of more than 80 of the UK’s
largest companies – including two-thirds of the top 20 FTSE 100 companies –
shows there has been a median increase of 7.8 per cent for FTSE 100 chief
executives, compared with a rise of 8.4 per cent in 2002. In comparison, their
FTSE 250 counterparts gained an increase of 5.1 per cent, compared with 6.6 per
cent the year before.

The study finds that the current median basic salary for FTSE 100 CEOs is
£650,000. After annual bonus payments, the median total rises to just over £1m,
and once long-term incentives are taken into account, the figure is boosted to
just over £1.5m.

In general terms this year, bonuses made up 47 per cent of chief executives’
basic salaries, and the value of long-term incentives represents 74 per cent at
the median.

The survey also finds that more companies are taking more of a ‘portfolio’
approach to offering long-term incentives.  www.watsonwyatt.com

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