CEOs still pocketing vast salaries

Oct 14 2008 by Nic Paton Print This Article

British chief executives have spent the past year raking in record-breaking multi-million pound salaries, despite the credit crunch, economic doom and gloom and growing public anger over excessive executive pay and bonuses.

A study of the UK's top 100 companies found that, at the same time as consumers were being forced to tighten their belts, the average pay for lead executives reached a record £3.5m over the past financial year.

Chief executive FTSE-100 salaries rose by 11.5% on the previous period, pollster Incomes Data Services said.

Five directors earned more than £10m and the average salary for a FTSE-250 top executive was almost £2.3m.

Bart Becht, CEO of consumer goods' giant Reckitt Benckiser topped the list for the second consecutive year, taking home an eye-watering £22,337,876.

Breaking this down, he received an income of £912,000, a bonus of £3,257,000 and a long-term incentive plan of £10,948,000. On top of this he exercised share options worth £7,049,767.

Tom Glocer, chief executive of news agency Reuters, was close on his heels, taking home £19,288,975, said IDS.

Steve Tatton of IDS said: "Greedy City bankers rather than fat cat directors may be currently attracting all the adverse comment, but unless remuneration committees avoid making toxic pay decisions over the coming year UK boardrooms may soon find the spotlight returning to their pay packages."

With the UK economy slowing, and possibly already even in recession, what will be interesting now will be to see whether future remuneration reflects these more straitened times, he argued.

"The proof of the pudding will be in the eating when large numbers of directors do not receive any incentive payments as a result of deteriorating corporate performance," he added.

The British unions' body the TUC, meanwhile, has called for a wholesale review and crackdown on the bonus culture in the City.

Responding to the UK government's £37bn purchase of shares in a number of UK banks yesterday, TUC general-secretary Brendan Barber said the banks had received as much cash as the annual defence budget and, in return, tax payers would want to see big changes.

"It is not enough to limit cash boardroom bonuses for a year and accept a few ritual resignations," he stressed.

"There cannot be big pay-offs for those who go, as was the case with Northern Rock. There needs to be a wholesale review of bonuses and pay throughout the upper levels of these banks, not just a year long ban on boardroom cash bonuses," he added.