The bosses of the UK’s ten biggest companies saw their total remuneration packages rise by more than 12 times the rate of inflation in 2003, according to new figures.
A survey by consultants Independent Remuneration Solutions (IRS) showed that packages soared by 24 per cent last year, pushing the average for each company chief to £5.4m.
The bulk of the rises took the form of benefits other than basic salaries which rose by only three per cent.
The IRS analysis of firms’ annual reports show that basic salary accounted for only 16 per cent of total remuneration as bosses received an array of benefits including bonuses, share options and pension contributions.
The figures were calculated by totting up the items disclosed in the reports such as basic pay, benefits and annual bonus, and added the "hidden figures" to reach a final total.
The highest paid CEO during 2003 was Sir Chris Gent of mobile phone group Vodafone with a total pay package of £10.9 million. Eric Daniels of Lloyds TSB was the worst-rewarded with a package of ‘only’ £2m.
Jean-Pierre Garnier of Glaxo, whose package sparked a shareholder’s revolt last year, saw his package restrained by the weakness in the US dollar.
IRS said the survey of remuneration packages was important because blue-chip firms were the "bellwether of UK best practice" and set the example for other firms to follow.
The report's author IRS director Cliff Weight, said: "CEOs are getting bread, butter, jam and cream."
And he slammed companies for failing to make clear in their annual reports the real sums being paid to their executives.
"It is unclear how much CEOs are actually paid," he said. "Although companies disclose each of the elements of remuneration, they spread the data over numerous pages of the remuneration committee report."
The Stock Exchange’s combined code on corporate governance requires the remuneration report to be "clear, transparent and understandable to shareholders" but according to Mr Weight, no company managed to do this.
"Some do not include the expected value of long-term incentives and none state the total remuneration," he said.
The corporate governance regulations introduced in 2002 have failed to bring greater transparency and accountability and done nothing restrain directors’ pay, the report asserts.
Moreover, the move towards more performance-related pay had not been matched by reductions in salaries.
Mr Weight said that if shareholders were to be able to have a say on what kind of packages were acceptable, they had to be given a clear picture in annual reports.
"I can understand it, but it’s bloody hard work," he said. "What this survey has done is illustrate the importance of all the different elements of remuneration. You cannot just look at salaries.
"It’s only when you look at the whole package that you understand how much they are paid."
