The top bosses of Britain’s biggest companies are preparing for freeze in pay for the next two years. The news comes from a report by deloitte accountants which stated that Executive directors at more than half of FTSE-350 firms did not receive a pay rise last year, and in the previous year before more than two thirds had their pay frozen.
Deloitte said that the average salary increase has been much lower compared to figures from pre-recession times, currently the average salary increase is thought to be at 3percent
“It appears that the years of executive salaries increasing at rates far in excess of inflation are, at least for the moment, well and truly over,” said Stephen Cahill, a partner at Deloitte.
“Companies are now recognizing that increases for executives must be considered fair and reasonable in the context of current business circumstances and the pay and conditions for employees more generally.”
However, while executive bonuses were also found to be falling at FTSE-250 firms, the research confirmed that bonuses were bouncing back in FTSE-100 companies. In these businesses, payments climbed to 98 per cent of directors’ basic salaries, up from 95 per cent, according to the survey.
Only 3 per cent of the UK’s top 30 companies in the FTSE-100 paid no bonus in the last financial year, which was down from 10 per cent the previous year.
Cahill explained that an unexpected rise in profits for top companies last year meant “the hurdles for bonus payments turned out to be easier to achieve than remuneration committees had expected”.
Meanwhile, separate research has revealed that pay rates for more junior city staff have grown sharply over the last year.
The average base salary of an assistant vice-president increased by 12 per cent, from Ã‚Â£62,945 to Ã‚Â£70,480, said a report by city recruiters Astbury Marsden.
“The salary inflation largely passed junior staff by, but now those lower down the pyramid are starting to see their wages grow significantly,” said the company’s managing director, Jonathan Nicholson.