Top UK bosses see pay rise more than a quarter

2006

The pay of Britain's top directors soared by more than a quarter last year, a rise seven times the rate of the average worker's wages, a new survey has suggested.

The annual survey for the Guardian newspaper and consultancy Reward Technology Forum suggested executive pay, which rose 28 per cent last year, was also rising at 11 times the current rate of inflation.

It compared with rises of 16 per cent for directors in 2004, 13 per cent in 2003 and 23 per cent in 2002.

The average pay for a chief executive was now £2.4m, while the going rate for a finance director is £1.1m, it added.

Eight chief executives had basic salaries – before bonuses or other rewards – of more than £1m, or nearly £20,000 a week.

They include Tesco chief Sir Terry Leahy, BP's Lord Browne and Charles Allen, the chief executive of underperforming ITV, who is stepping down after pressure from disgruntled shareholders, said the Guardian.

The survey also suggested that investment banking, fund management and the oil and property businesses remained the most lucrative areas for workers, while supermarkets and cleaning companies were the worst payers.

As in previous years, the salaries of the better paid workers have risen much faster than those at the bottom, meaning the gap between the richest and poorest is continuing to widen, said the newspaper.

There was also a gulf in retirement income between the highest and lowest paid.

BP boss Lord Browne could look forward to an annual income on retirement of almost £1m, according to the study.

Lord Browne had amassed a pension pot of £20m during his career at the company. But the widening gap between workers' pensions and the bumper packages on offer to boardroom executives risked becoming an increasingly bitter industrial relations battleground, the paper warned.