FTSE 100 executive directors pocketed a 49% increase in remuneration in 2010, bringing the value of their salary, bonuses and other incentives to an average of £2.7 million.
While salaries rose by 3.2%, bonuses increased by 23% to an average of £906,000. The increase, which far outstrips ordinary workers’ pay rises, was marginally less marked for chief executives, who typically saw their package rise by 43%.
The figures were highlighted in a report by Incomes Data Services. Steve Tatton, editor of the report, said: “At a time when employees are experiencing real wage cuts and risk losing their livelihoods, without further explanation it may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors.”
Today’s figures will fuel the debate around excessive boardroom pay. Last month, business secretary Vince Cable launched a consultation on the future of narrative reporting, including a discussion paper on executive remuneration.
“The general disconnect between pay and long-term performance suggests that there is something dysfunctional about the market in executive pay or a failure in corporate governance arrangements,” said Cable.
TUC general secretary John Monks said today: “The pay gap between directors and the rest of us is getting wider every day. No one can now claim that these rises bear any relation to performance. It’s time for a serious look at reforming a company law system which permits such shocking and unfair rises.”
Unite general secretary Len McCluskey said: “This damning report shows just how much these pampered directors are removed from the lives of working people struggling to hold onto their jobs and paying soaring energy, food and transport costs.
“This is an astonishing display of boardroom greed. It is exactly why people have been occupying St Paul’s to protest against the behaviour of the City elite and a government which is turning a blind eye to these abuses.”
XpertHR’s annual review of pay trends for 2011, published last month, showed a median increase of 2.2%. Retail price index inflation for the same period was 5.2%.