Boardroom pay comes under scrutiny
Filed under: News
Non-executive chairmen of top companies received average pay rises of 6% last year, taking their earnings to almost £400,000, a new study has revealed.
Pay analysts Incomes Data Services (IDS) said its research among FTSE firms showed average fees ranged from £270,000 in technology businesses to over half a million pounds in oil and gas companies.
Fewer firms increased non-executive directors' pay in 2012 than in the previous year.
Average fees for non-executive directors (NEDs) increased by 4% last year to £64,000 - double the amount of 12 years ago.
Nasreen Rahman, assistant editor at IDS, said: "Executive pay at FTSE 100 businesses is coming under increased scrutiny. That is especially the case in financial services, where the connection between risk and reward is attracting attention not only from shareholders but also from regulators.
"Remuneration committee chairmen have a crucial role to play in improving corporate governance in the wake of the credit crunch. Aligning the interests of the chief executive and shareholders is a particular challenge."
Fees for the chairmen of company remuneration committees increased by 14% last year, said the report.
TUC general secretary, Frances O'Grady, said: "These figures highlight once again why we need urgent reform of boardroom pay. Top directors are showing little restraint while millions of workers are suffering real-term losses to their incomes and are really feeling the squeeze on their living standards.
"FTSE 100 directors' pay rose over seven times faster than average wages in some cases last year, with rises well above inflation.
"These bumper settlements bear little relation to performance. Allowing workers a seat on remuneration committees would help inject a much-needed dose of reality into pay-setting."