Remuneration | CEO pay at lowest level in five years

CEO pay at lowest level in five years

Whilst many workers dream of earning the kind of salary that comes with a CEO title at a multi-national company, the latest data from Deloitte has discovered that the gap between pay for FTSE 100 chief executives and their employees is at its closest for five years – as companies bow to pressure from investors to lower C-Suite compensation.

The average pay packet for an FTSE 100 CEO in the last financial year totalled £3.4million – this is down from an average of £4million in the previous 12-month period – according to Deloitte. This represents the biggest drop in annual salary in five years.

Several multi-national household names have been hit by the revolts, including Barclays, Ocado, Standard Life Aberdeen. At Standard Chartered, more than one-third of shareholders voted against the company’s new pay policy over reported concerns over CEO Bill Winters’ pension allowance. Certain companies had hoped to avoid the furore by moving to action pay change previously, including the likes of Lloyds and Aviva. 

“Since the introduction of the 2014 reporting and voting regime, we have seen remuneration levels stabilise and a significant shift in the simplification of pay packages,” said Stephen Cahill, Vice Chairman at Deloitte told the Financial Times. “Under the vast majority of long-term incentive plans, executives will now have to wait five years to receive any shares.”

Deloitte also found that almost one third of FTSE 100 CEOs received no increase in base salary, with the average salary increase overall topping out at around two per cent. However, bonus pay-outs remained similar to the previous year at an average of 70% of salary compared to 72% in the previous period. 

“We are seeing continued evidence that investors expect the same standard of disclosure and engagement on pay across the UK market, with declining levels of shareholder support in the FTSE 250,” concluded Cahill.

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Comments (2)

  • Sir
    Wed, 21 Aug 2019 1:29pm BST
    The downward pressure on C-suite pay is a very real concern if we are to retain top talent in our key positions in a very competitive international market. It may well keep share-holders happy, but it is surely a short-sighted approach, especially in light of Brexit.
  • Sir
    Wed, 21 Aug 2019 1:24pm BST
    The Gender Pay Gap pales into complete insignificance compared to the Seniority Pay Gap.
    This is a national shame and outrage - there should be riots in the streets. Life must be so tough on £3.4 pa (and that's the average)

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