CEOs ‘Make More In One Year Than A British Worker Pays In His Life’ | Salaries and bonuses for executives

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The annual salary of FTSE 100 chief executives has fallen during the pandemic, but it is still equal to what a major worker will receive in his lifetime, according to a report highlighting the UK’s wage gap and taxpayer support that has kept some companies afloat.

The Center for High Pay said the chiefs of companies in the blue-chip index earned an average of £2.69m in 2020, with vaccine maker AstraZeneca chief executive Pascal Soriot taking the top spot thanks to a £15.45m deal.

The average wage figure is down 17% compared to the £3.25m recorded in 2019, but is still 86 times the £31,000 the average British worker can expect to earn in a year.

The center and the GMB trade union noted the gap between executive bonuses and regular pay, and raised concerns that some companies offering bumper salary deals have relied on taxpayer support during the pandemic.

Across nine companies that have used time off for their employees but have yet to say they will pay it, bosses have earned an average of £2.2m each. These companies include owner of Ladbrokes Entain, owner of British Airways IAG, and Rolls-Royce.

The director of the Center for Higher Pay, Luke Hildyard, said the fact that salary packages declined between 2019 and 2020 shows that bonus deals were working as intended, at least to some degree, in line with shareholder and employee experience.

“On the other hand, these are still very generous bonuses for individuals who have already made millions of pounds over the course of their careers, at a time when government support for the economy in general has been more important to the survival and success of the UK’s largest companies than the decisions of their CEOs.”

The higher CEO salaries reflect a wider gap between the rich and the poor in the UK than in most other European countries.

“The inequalities exposed by the pandemic and the amount of public money used to protect large corporations could strengthen the case for measures to contain higher wages and rebalance severe income differentials.”

Soriot’s deal for 2020 puts him at the top of the list of highly paid FTSE 100 chiefs, ahead of the head of credit rating agency Experian, Brian Cassin, for £10.3m and Albert Manifold of building materials group CRH, for £9.9m. .

Last year, the Center for Higher Pay said CRH showed the FTSE 100’s highest pay differential — the gap between president and employee pay.

The manifold was paid more than 200 times what the median CRH worker earned in a year. Manifold was paid 166 times the average salary of a CRH worker last year, and its earnings were among the highest ever for an Irish executive, according to the Irish Times.

The GMB union said the average FTSE 100 chief executive’s pay deal of £2.69m was about as much as a major factor could expect to earn in his lifetime.

“The pandemic has brought to light the huge inequalities that exist in our society,” said Gary Smith, Secretary General of the GMB.

“If this government is serious about raising the agenda, ministers must make sure our NHS and local government employees get an appropriate pay raise – while passing legislation to close the obscene wage gap in the private sector.”

While growing pay splits persist across the FTSE 100, this year’s High Pay Center report showed that bonuses and base wages declined during 2020.

Among the FTSE 100 companies, 64% paid an annual bonus to their CEO, down from 89% in 2019, while 77% paid stock-based “Long Term Incentive Plans” (LTIP) based on performance over the previous three to five years, compared to 82% in 2019.

The average bonus size has decreased from £1.1 million to £828,000, while the average LTIP payout has decreased from £2.4 million to £1.38 million.

But some bosses enjoyed a raise, with the biggest increase awarded to Peter Jackson, CEO of gambling giant Flutter. His salary has more than tripled from £2.1m to £7.5m due to a payout from the stock-based bonus system.

Female managers were less paid than their male counterparts, with an average income of £2.63m compared to £2.8m for men. The Center for High Pay noted that the small sample size – there are only six female presidents in the FTSE 100 – meant that the comparison was of limited value.

Shareholders unhappy with Soriot’s wage deal

Soriot’s wage deal, the highest in the FTSE 100, has been the subject of discontent among shareholders.

He has already earned £86m during his nine-year stint at AstraZeneca which is widely seen as a success.

But nearly 40% of voting shareholders have refused to back his growing deal of the year, worth £18m and potentially his cumulative bonus since 2012 after £100m.

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The rebellion wasn’t enough to stop the reward package from moving forward, which means Soriot can expect a rich bounty for the agonizing year that AstraZeneca produced and sold its first Covid-19 vaccine at cost but still finds itself at odds with the European Union.

The 27-nation bloc has taken legal action against AstraZeneca, accusing it of failing to honor a contract to deliver vaccines, and demanding damages.

In July, AstraZeneca said it hoped to resolve the issue within weeks.

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