The median pay for chief executives of FTSE 100 companies has fallen by almost 20 per cent over the past year, according to accountancy firm Deloitte.
Median pay, a figure representing the pay rate half way between the lowest and highest paid executive, dropped from £4.3m in 2016 to £3.5m this year as the number of CEOs receiving a pay increase of over 3% has halved since last year.
At the same time, median salaries across the companies surveyed rose by about 2%.
The figures re included in a preview of Deloitte’s annual FTSE 100 remuneration report where Deloitte said policies introduced to limit bosses’ pay appeared to be working.
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Stephen Cahill, vice chairman at Deloitte said:
“The fall in executive pay demonstrates that remuneration committees are making a real effort to address shareholder concerns,” said .
“This is the first cycle where the legislation introduced in 2013 and primarily voted on during the 2014 AGMs will have taken effect.
“It seems the current legislation is working.”
The firm’s remuneration report also said there had been a reduction in bosses’ bonuses and pension allowances for new appointees.
The figures echo a recent report by the High Pay Centre and the CIPD, which found that average pay packages for chief executives had fallen from £5.4m to £4.5m.
The High Pay Centre said the average pay ratio between FTSE 100 bosses and the average pay package of their employees has fallen to 129:1 – meaning that for every £1 the average employee is paid, their chief executive gets £129.
But the director of the High Pay Centre, Stefan Stern, suggested public pressure had led to what may turn out to be a “one off” fall in pay, and that this year average executive pay had been skewed by high-profile pay cuts for one or two individuals.
New rules in 2013 obliged firms to provide greater transparency over the pay of their top executives in relation to other employees and to hold a binding shareholder vote on pay every three years.
Cahill said he did not believe further intervention was necessary.
“With many companies renewing their policies this year we are seeing further moves to incorporate the best practice provisions shareholders now expect,”
“The current framework is working well and we do not believe further regulation is needed to move things forward.”
But that research found that the pay decline had come as the gap between executive wages and the amount earned by an average worker had grown considerably.
It would now take a typical UK employee 160 years to rake in the average annual amount awarded to the average FTSE 100 boss.
Rebecca joined the HRreview editorial team in January 2016. After graduating from the University of Sheffield Hallam in 2013 with a BA in English Literature, Rebecca has spent five years working in print and online journalism in Manchester and London. In the past she has been part of the editorial teams at Sleeper and Dezeen and has founded her own arts collective.
- Rebecca Clarke
- Rebecca Clarke
- Rebecca Clarke
- Rebecca Clarke
