FTSE 100 company directors saw their total earnings soar by an average of 55 per cent during the past year in a startling recovery from short-lived restraint during the recession, according to research to be published today.
The findings from Incomes Data Services (IDS), the pay monitoring group, are likely to reawaken controversy over executive pay.
The average FTSE 100 chief executive took home £4.9 million (€5.5 million) in total earnings in the year to June, according to IDS. That represented 88 times the average pay of all full-time workers – down slightly from a peak multiple of 94 in 2008, but sharply up on 10 years ago, when corporate chiefs earned 47 times the average wage.
Basic salary grew by only 3.6 per cent for FTSE 100 chiefs last year, but their pay packages were boosted by a resurgence in bonus payments, the value of share option gains and long-term incentive plans.
IDS warned that “the business as usual” approach of FTSE remuneration committees after such a short period of restraint risked upsetting shareholders. Across the FTSE 350, total board pay went up by an average 45 per cent.
“It seems the days of earnings restraint by FTSE 350 directors were short-lived. It is as though the recession never happened,” said Steve Tatton, editor of the IDS Directors’ pay report.
“It stands in stark contrast to the coalition government’s concerns about pay fairness and calls for senior executives in the public sector to accept pay cuts.”
Derek Simpson, joint general secretary of the Unite union, said ordinary workers would be “angry” about the news given that they have suffered pay freezes, shorter hours or lost their jobs during recent months.
“It shows that David Cameron’s phrase ‘we’re all in it together’ is pretty shallow,” he said.
