Bosses’ bonuses ‘up 187 per cent’ in last decade
The average annual bonus for a director in a FTSE 100 firm has increased by 187 per cent in the last ten years, a new study finds.
The huge leap in bonuses for top bosses has come despite the wider economic turmoil of recent years.
Salaries have also increased over the same 10-year period, by 63 per cent, according to research done by the High Pay Commission.
The average value of long-term incentive plan awards paid out to top executives across the FTSE 350 has increased by 700 per cent in total, the report said. In the state-supported banks, average total earnings of directors are now 130 per cent higher than ten years ago. In 2000, bank directors earned on average £1.7m while in 2010, this reached just under £4m.
The Commission will unveil its full findings in November.
Deborah Hargreaves, the High Pay Commission’s chair, said: “The evidence exposes the myth that big bonuses and high salaries result in better company performances.
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“There has been massive growth in what has been termed as performance-related pay yet no such corresponding leap forward in company performance.
“All we’ve seen is things getting much more complicated – in many ways, masking the real value of what executives get paid.
“Corporate governance reforms attempting to link pay with performance appear to have done little more than add to the huge complexity of executive packages, reward schemes and bonuses that make up the pay of FTSE 100 directors.”
Bob Crow, leader of the Rail Maritime and Transport union, said the figures would affect pay negotiations for workers.
“These massive increases in top bosses’ pay and bonuses over the past decade show that it’s one rule in the boardroom and another on the shop floor.
“We will take no lectures on austerity from a boss class that’s laughing all the way to the bank,” he said.
A spokesman for the Department for Business, Innovation and Skills said the government would study the “interesting” report as it looked into corporate governance.
