Chief executives’ pay tops £2.5m

The average pay of a chief executive at the UK’s top companies, including bonuses and gains from long-term incentive plans, is now more than £2.5m.

Directors’ pay at top UK companies climbed an average of 16.1% last year – four times faster than average earnings and eight times the rate of inflation, according to the Guardian’s annual executive pay survey.

The 16% increase for 2004-05 follows a 13% rise for the previous year and 23% the year before that. An average chief executive is paid 113 times more than an average UK worker.

The highest-paid executive last year was Sir Martin Sorrell, the chief executive of WPP, the world’s second biggest advertising agency. Pay plans came to fruition for Sorrell in 2004, taking his rewards to more than £52m.

Other top earners include Tony Ball, the former chief executive of BSkyB, Jean-Pierre Garnier of GlaxoSmithKline, James Nicol of the engineering group Tomkins and David Harding of bookmaker William Hill.

The survey also reveals that, for the firts time, female directors  breached the £1m pay barrier last year – five of them making the mark.

The best-paid employees were at Man Group, with staff at the City-based hedge fund manager last year earning an average of £115,000 each.

At the other end of the scale, the worst-paid employees work in the catering and hospitality industries, at companies such as Compass, Whitbread and supermarket giant Tesco.

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