UK chief executives have seen their pay rise almost 80% since Labour came to power in 1997, according to new research.
A report from Aston Business School and the University of Pennsylvania shows how large increases in salaries and bonuses over the period of 1997 to 2003 mean that the total pay of British chief executives in the UK’s biggest companies is catching up with that of US bosses.
The average total annual pay of a UK company chief executive has risen from £955,000 to £1.7m. In the same period, the average total pay awarded to the boss of a US company has remained relatively flat, at £2.8m.
“It is not fat-cattery,” said Martin Conyon, one of the report’s authors. “Executive pay is increasingly performance-based. The proportion of risk-free pay is falling and the proportion of risky pay is rising.
“If I was a fat cat, I would prefer to have risk-free pay than have all these share options that I could screw up,” he told the Sunday Times.
Conyon and his co-author, Graham Sadler, surveyed almost 200 of the UK’s biggest listed companies between 1997 and 2003, the years after Labour came to power.
They will present their findings to the annual conference of the Royal Economic Society today.