Average pay of Britain's top CEOs last year - $9.7 million

LONDON • The average pay of bosses in Britain's FTSE 100 rose more than 10 per cent last year to an average of £5.5 million (S$9.7 million), according to a survey that is likely to reinforce a drive by Prime Minister Theresa May to curb excessive pay.

Britain's new prime minister has denounced as irrational and unhealthy the yawning gap between the amounts paid to bosses and those paid to the average worker, vowing to better align incentives with the long-term interests of companies.

A survey by the High Pay Centre said the average FTSE 100 chief executive's pay package hit £5.48 million last year, up from £4.96 million in 2014, meaning CEOs now earn 140 times more than their employees on average. The survey said FTSE 100 CEO pay had now risen by 33 per cent since 2010.

"There is apparently no end yet in sight to the rise and rise of FTSE 100 CEO pay packages," director Stefan Stern said. "In spite of the occasional flurry from more active shareholders, boards continue to award ever larger amounts of pay to their most senior executives."

The think-tank added that the top 10 highest-paid chief executives of companies on FTSE 100 - a share index of the top hundred companies on the London Stock Exchange - were all men.

Britain has seen a resurgence in investor activism in the last year, with several FTSE 100 bosses criticised at annual general meetings for taking ever larger pay deals at a time of weak economic growth.

Mrs May, who became the prime minister last month, used a speech before she took office to set out her plans for the economy, arguing that it did not work for everyone in society and needed to be reformed.

Her proposals included making shareholder votes on corporate pay binding. She said she wanted to see more transparency around bonus targets and the publication of the ratio between a CEO's pay and that of the average company worker.

According to the survey, the three highest-paid bosses in the blue- chip index were WPP's Mr Martin Sorrell, Mr Tony Pidgley at housebuilder Berkeley and Mr Rakesh Kapoor at Reckitt Benckiser.

The £70 million pay package awarded to Mr Sorrell was one of the biggest payouts in British history. A third of investors refused to back the deal while Mr Sorrell, one of the best-known businessmen in Britain who built the advertising group from scratch, said all his wealth and interests were tied up in the future of the company.

The High Pay Centre is an independent think-tank that monitors executive pay and campaigns to reduce the income gap.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on August 09, 2016, with the headline 'Average pay of Britain's top CEOs last year - $9.7 million'. Print Edition | Subscribe