UK Fat Cat Pay Soars to £5.9m Amid Calls for Even Higher Rewards
The average pay packet for Britain's top corporate bosses has surged by almost a fifth in the past year, according to new research. Analysis by accountants Deloitte reveals that typical FTSE 100 chief executives raked in nearly £5.9 million in pay and perks last year.
This bumper sum represents an increase of just under 18% from the £5 million recorded the previous year. This means pay for those at the very pinnacle of British business leapt approximately 4.5 times faster than the average UK worker's earnings during the same period.
Shareholders Asked to Approve Massive Increases
Despite these already substantial figures, many companies are seeking permission to hand their executives even larger rewards. Deloitte's analysis, which examined 55 FTSE 100 companies that have published their latest annual reports, shows that 26 firms are seeking shareholder approval for new binding pay policies for their top bosses.
Of those, 16 are proposing significant increases in what executives could potentially earn, with an average leap of 200%. Such increases would typically only be achieved if performance targets for long-term incentive plans are met.
Environmental Targets Being Watered Down
However, it appears companies are simultaneously making it easier for executives to hit their targets. Twenty of the 55 companies analysed are reducing the weighting used for environmental, social, and governance measures when determining whether top bosses should receive substantial bonuses.
This development comes amid growing calls in the City for executives running London-listed companies to be paid more generously. Proponents argue this is necessary due to intense competition from the United States and other global markets, as well as from private equity firms and other sectors where executive compensation faces less scrutiny.
Record Pay for Individual Executives
While Deloitte did not disclose the names of the highest-paid executives in their analysis, recent corporate filings reveal some staggering individual compensation packages.
Lord Wolfson, chief executive of fashion retailer Next and a Conservative peer, saw his pay packet rocket more than 50% to £7.4 million last year - a record for the company. His basic salary alone was £967,000, boosted by nearly £6.2 million in bonuses. This total equates to approximately 192 times what the average UK worker earned last year.
Next's profits jumped 14.5% to over £1.1 billion last year, with sales reaching £7 billion.
Pharmaceuticals giant AstraZeneca's CEO Pascal Soriot remains one of Britain's best-paid bosses, with pay and perks totalling £17.7 million last year. Meanwhile, banking giant Barclays' chief executive C.S. Venkatakrishnan saw his compensation package increase from £11.6 million to £15 million.
Global Competition Driving Pay Increases
Mitul Shah, partner in Deloitte's executive remuneration and reward practice, commented: "We continue to see a significant number of companies propose substantial changes to variable pay opportunities in order to retain and attract the best people in an increasingly competitive global market."
"In some cases, increases have been accompanied by an increase in the stretch of performance targets and/or an increase in weighting on financial metrics. It is likely that the largest global companies will continue to keep their executive remuneration packages under review to ensure they remain competitive."
This surge in executive pay occurs against a backdrop where millions of ordinary UK families remain in the grip of a cost of living crisis. The widening gap between boardroom and average worker compensation continues to fuel debates about income inequality and corporate governance standards in Britain.
