Incomes Data Services (IDS) carried out the research and found that the top earners’ average salary rose to Ã‚Â£2,697,664 per annum. This figure includes fixed pay, salary, benefits, the monetary value of long-term incentive plans and bonuses – the latter of which leapt by 23 per cent, from Ã‚Â£737,624 to Ã‚Â£906,044.
Meanwhile, chief executive officers enjoyed an increase of 43 per cent, with the highest remuneration packages awarded to Mick Davis of Xstrata at Ã‚Â£18,426,105 and Bart Becht of Reckitt Benkiser, who received Ã‚Â£17,879,000.
“At a time when employees are experiencing real wage cuts and risk losing their livelihoods, without further explanation it may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors,” said Steve Tatton, Editor of the report. “The pay gap between the boardroom and the shop floor does not yet show any signs of closing.”
Tom Gosling, Partner at PwC, has warned that firms making such remuneration decisions should bear in mind the Government’s intentions to require them to disclose the link between pay and performance over a five-year period. They should also consider how pay for the most senior executives compares with company profits and pay of the wider workforce.
He commented: “Throughout the recent recession executive pay continued to rise year on year. If this continues, it will only increase the political pressure to act. Companies need to be careful that they don’t create a situation where regulation is imposed upon them, with all its unintended consequences.”