One in four bosses of FTSE 100 companies has taken a pay cut during the coronavirus crisis, according to research by the High Pay Centre and PA News Agency.
Most of the 25 chief executives who have reduced their pay during the pandemic have done so by 20%, echoing the proportion of pay that workers miss out on if they are placed on the government’s Coronavirus Job Retention Scheme.
Some bosses have taken even bigger cuts, however. Andy Ransom, chief executive of Rentokil, has slashed his salary by 35%, donating the rest of his usual salary to an employee fund.
Eleven companies, including Centrica, HSBC, Lloyds and ITV, have scrapped bonuses and/or long-term incentive plans for senior executives.
Only one company in the FTSE 100 – Premier Inn owner Whitbread – has not yet announced any plans to reduce pay despite announcing that it will apply to the government’s furlough scheme for its workers. Whitbread said the issue would be discussed at its remuneration committee later this month.
Primark owner Associated British Foods and EasyJet have both been criticised for still paying out dividends to shareholders while furloughing thousands of workers.
Nine of the FTSE 100 have cancelled or suspended dividends, but have not yet cut executive pay. Car sales platform Auto Trader recently announced to shareholders that it would furlough staff but has not confirmed if it would slash dividends.
The High Pay Centre has identified 11 FTSE 100 companies that plan to use the job retention scheme, but said this figure would be likely to grow in the coming weeks. Those employers are Associated British Foods, Auto Trader, Centrica, easyJet, International Airlines Group, Melrose, Next, Rentokil, Taylor Wimpey, Whitbread and – most recently – Rolls Royce.
Luke Hildyard, director of the High Pay Centre, said: “With the economy facing great uncertainty, and people’s jobs and livelihoods, as well as a considerable amount of public money, now at stake, it’s vital that companies make savings.
“Very high pay for top earners, who can easily afford a pay cut while still maintaining a lifestyle beyond the wildest dreams of most people, is the obvious place to start.
“Our figures show that some companies are taking meaningful action in this respect by cancelling bonuses and incentive plans, or making donations to employee funds or the NHS. Too many, however, are making token gestures or doing nothing at all.”