Boardroom pay roars ahead

HUGE disparities have emerged between the pay rises secured by Britain's top executives over the past three years and the returns enjoyed by their shareholders.

Of the 20 biggest increases, seven have given shareholders a total return - capital gain plus dividends - of less than 50 per cent, with several much lower. The survey by Datastream, the financial information provider, also points to a widening gulf between boardroom and senior managerial pay and that of the rest of the staff.

This is the first attempt to describe systematically the extent to which corporate leaders are short- changing shareholders and follows on the heels of calls for restraint in boardroom pay.

In all 20 firms the top manager's pay also far outstripped the average workforce pay rise. At Blue Circle, for example, Keith Orrell- Jones's 173.7 per cent pay rise compared with just 21.5 per cent for the cement company's staff.

Half of the top executives earned more than pounds 500,000 in 1993, with only two companies, Associated British Foods and Burmah Castrol, paying their top men less than pounds 250,000.

The worst offenders included banks and retailers as well as the privatised utilities. Liam Strong's doubled salary compared with a 26 per cent return for Sears shareholders and average rises of just 12 per cent for the workforce.

Top of the list for poor shareholder value is United Biscuits, where a 108 per cent pay rise over three years of the chairman, Sir Robert Clarke, compared with a 10 per cent fall in shareholder value.

At Barclays, BZW chief David Band's 160 per cent jump to pounds 1.4m compared with a return to shareholders of 42 per cent.

Sainsbury's deputy chairman, Tom Vyner, enjoyed a 115 per cent salary increase while the supermarket's shareholders had to settle for a 23 per cent return.

Not all FT-SE 100 companies gave such bad value. Gerry Robinson's pounds 407,000 salary last year was 91 per cent higher than the top pay packet at Granada three years ago, but shareholders have seen their investment more than triple.

At the engineer Siebe, shareholders who have seen a 128 per cent return will have no quibble with the top man, Barrie Stephens, whose pounds 677,000 salary represents a relatively restrained 42 per cent increase since 1991.

Wolseley, the building materials company, more than doubled the value of shareholders' investment while chairman Jeremy Lancaster's pounds 288,000 shows only an 11 per cent increase since 1991.

His salary is a drop in the ocean compared with last year's top earner, Direct Line's Peter Wood, whose pounds 18.5m earnings last year meant the change in the top salary at Royal Bank of Scotland weighed in at 3,717 per cent.

----------------------------------------------------------------- SALARY RISES ----------------------------------------------------------------- Top 10 salary rises over past 3 years (excluding Direct Line's Peter Wood) Company 3-year rise Ave salary 3-year share- in top salary rise holder return Eastern Electricity 197% 28% 170% National Power 188% 41% 116% Blue Circle 174% 22% 31% Vodafone 171% 39% 65% North West Water 151% 45% 80% Carlton Communications 148% 9% 74% Cable & Wireless 124% 48% 52% Rentokil 121% 13% 57% Sainsbury 115% 19% 23% Bowater 114% 31% 61% ----------------------------------------------------------------- Source: Datast ream -----------------------------------------------------------------

(Photographs omitted)