At least 22 FTSE 100 companies were shown to be supported by the Covid Corporate Financing Facility (CCFF) or the Coronavirus Jobs Retention Scheme (CJRS, also known as furlough), and the mean pay for CEOs of these companies was £2.36 million.
The annual survey by the High Pay Centre, which examines how the pandemic has affected top pay, has also shown that the median FTSE 100 CEO is now paid £2.69 million.
This figure is significantly down on the median CEO pay of 2019, recorded at £3.25 million, representing a fall of 17 per cent.
The highest earning CEO was Pascal Soriot of AstraZeneca, who made 50 per cent more than the next highest paid CEO, making a whopping £15.45 million.
Mr Soriot was followed by Brian Cassin of Experian, who made £10.3 million in 2020.
The pandemic has appeared to significantly impact the pay and rewards given to CEOs, with only 64 per cent of companies paying their CEO an annual bonus, down from 89 per cent in 2019.
The average bonus size fell from £1.1 million to £828,000.
Alongside bonuses declining, ‘long-term incentive plans’ also fell, with 82 per cent paying out in 2019, compared to 77 per cent in the most recent survey.
The LTIP payment figure decreased from £2.4 million to £1.38 million.
Only six companies had a female CEO throughout the 2020 financial year, and their median pay was below that of their male counterparts, at £2.63 million versus £2.8 million.
Some suggest that the CEO rewards system is working as intended, as pay packages are designed to reflect the experience of the company in that financial year, so lower levels of pay and bonuses are effective in describing the way the pandemic has affected most companies.
However, some are quick to point out that the rewards received by CEOs are still extremely generous, particularly at a time where many of their employees were furloughed, and some companies saw extensive redundancies.
At least 22 FTSE 100 companies were supported by the Covid Corporate Financing Facility (CCFF) or the Jobs Retention Scheme (JRS, also known as furlough), and the mean pay for CEOs of these companies was £2.36 million.
Many are examining the way in which government support, rather than executive decisions, was perhaps more crucial this year in the survival of many companies, with authors of the report Rachel kay and Luke Hildegard commenting:
The cost of the various government schemes will be borne by society as a whole – meanwhile the pay awards of the typical FTSE 100 CEO could cover the furlough costs of dozens of workers, and all FTSE 100 CEOs have already accumulated sufficient incomes over their careers to maintain a vastly higher standard of living than the average UK worker.
Therefore, the question of whether pay awards for CEOs and top earners at these companies need to be maintained beyond a certain upper limit (an income of around £150,000 is likely to put the recipient in the top 1% of UK earners) needs to be asked.
*This research covers the FTSE 100 cohort as at June 2021 and analyses the information published in their annual reports for financial year-ends in 2020.
Megan McElroy is a second year English Literature student at the University of Warwick. As Editorial Intern for HRreview, her interests include employment law and public policy. In relation to her degree, her favourite areas of study include Small Press Publishing and political poetry.
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