Business as usual for executive pay

Sep 13 2010 by Brian Amble Print This Article

The British economy may still be in the doldrums, but that doesn't seem to be having any effect on the size of the bonuses paid to the country's top executives.

In fact according to a new report by Deloitte, directors of the 100 largest companies on the London Stock Exchange enjoyed bonuses amounting to 100 per cent of their basic salary last year, rising to 140 per cent for the top 30 firms.

That's almost 20 per cent higher than last year and approaching the levels seen prior to the recession.

With headline figures like that, the fact that over half of FTSE 350 companies will not be increasing the base salaries of their executive directors this year seems rather academic.

Nevertheless, Deloitte's Stephen Cahill argued that the figures suggest that the days of executive salaries increasing at rates far in excess of inflation and the increase in average earnings are over.

"Companies are now recognising that increases for executives must be considered fair and reasonable in the context of current business circumstances and the pay and conditions for employees more generally," he said.

Whether average employees see such bonuses as "fair and reasonable" is a moot point. After all, outside the Alice-in-Wonderland world of financial services, how many people can expect to earn their salary all over again in bonuses every year?