04 December 2012
Report: Executive pay growth vastly outstripping general wages
Chief executives' pay packets increased by an average of 12 per cent in the last financial year, according to the High Pay Centre's new report.
This rise means the typical salary of a top boss is now equivalent to 185 times the average wage, despite the depressed economic climate and promises of government action to curb executive pay levels.
Director of the High Pay Centre Deborah Hargreaves said there has been "no clear change in the boardroom culture and no recognition that these pay awards are unacceptable".
The average FTSE 100 chief executive's pay has trebled over the last decade and stood at £4.8 million last year. The High Pay Centre contrasted this with the job insecurity, inflation and pay freezes facing many ordinary workers.
Ms Hargreaves said the remuneration of executives remains unnecessarily complex and too loosely tied to company performance, with the government so far failing to present a viable solution to the problem.
She claimed the lack of correlation between a firm's results and the compensation enjoyed by its directors is "having a corrosive impact on our living standards, our economy and our society".
The leader of the independent think tank added: "It damages public trust in businesses and it demoralises employees whose rewards for their efforts are tiny in comparison with their bosses."
Just two pay packages in the FTSE 100 were voted down this year, despite talks of a 'shareholder spring' that would see excessive remuneration plans rejected at annual meetings.
However, a recent publication by KPMG suggested the shareholder backlash against pay levels in the boardroom will not reach its peak for another year or so.
The company's Guide to Directors' Remuneration 2012 report noted that a handful of cases generated a significant amount of media attention this year, but claimed these outbursts of shareholder discontent could merely be preparing the ground for what is to come.
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Posted by Chris Stevenson