The average FTSE 100 CEO pay package increased by 12% last year, but increases in salary are likely to be more subdued in 2023, according to analysis by Deloitte.
Based on data from the first 55 companies to publish their 2022 annual reports, the median total pay package for a FTSE 100 chief executive, which includes the estimated value of long-term incentives as well as salary and bonuses, was £4.15m, up from £3.72m in 2021.
Annual bonuses remained high compared with pre-pandemic levels, with a median payout of 76% of the maximum award. This was down from 85% in 2021.
FTSE 100 CEO pay in 2022
High Pay Day comes early in 2023
Executives should get below-inflation pay rises, say investors
However, in light of investor guidance, the value of FTSE 100 CEO salary increases is expected to be lower in 2023. Over 90% have been set below the average rate awarded to the general workforce, with the median CEO salary increase set at 3.5%, compared with a 6% median for the workforce.
Last year the Investment Association, which represents investment managers, urged FTSE 350 organisations to rein in executive pay packets during the cost-of-living crisis.
Mitul Shah, partner in Deloitte’s Executive Remuneration practice, said: “Last year we saw a quieter AGM season as pay levels bounced back, following a period of temporary pay cuts and restraint during the Covid-19 pandemic. Investors were generally supportive in voting on remuneration reports – despite record-high bonus payouts.
“We are expecting a more challenging 2023 AGM season as investors closely scrutinise pay out-turns, with a particular focus on potential windfall gains made by executives on the back of incentive awards granted in 2020 during a dip in the market.”
Deloitte’s analysis also found that:
- more than nine in 10 FTSE 100 companies incorporate environmental, social and governance (ESG) measures into their incentive plans. Forty per cent include long-term environmental metrics
- around half (53%) are seeking a triennial binding vote on their remuneration policy this year, rather than an annual binding vote
- where companies are putting a new policy to vote, four in 10 are seeking approval from shareholders to increase maximum incentive levels related to performance, which many say will enable them to compete globally for talent.
Reward, compensation and benefits opportunities
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Browse all comp and benefits jobs
