However, there are signs that boardroom largess is beginning to be tempered. The rise in total earnings of chief executives and full-time chairmen actually fell from 8.8 per cent to 7.7 per cent in the past year, while their basic salary increases have remained broadly static at 5.3 per cent, the survey found.
The latest edition of the remuneration advisers' annual study of boardroom pay in 750 UK parent companies also shows that other directors enjoyed total earnings increases of 5.2 per cent, but that base salary rises were higher, at 6.8 per cent.
There are no 1995 figures for these executives because the Stock Exchange only changed its listing rules to require greater disclosure of remuneration for all main board directors in October of that year.
Considerable variations in pay exist between different sectors of the economy. The biggest pay increases for chief executives came in leisure and publishing, where salaries jumped by 9 per cent.
The largest increases in total earnings were the 11.8 per cent awarded to chief executives in food, drink and tobacco and the 8.1 per cent achieved by other directors in engineering and electronics. The lowest rises in total earnings were the 4 per cent given to chief executives in consumer goods companies and zero for other directors in building materials and construction.
The level of international involvement undertaken by an executive and the functional responsibilities incurred can also affect salary levels. In larger companies, "international involvement may command a premium of up to 25 per cent of base salary", says the study.
The report, UK Board Earnings, also finds that companies are increasingly taking up an alternative to the traditional share option schemes in an effort to provide senior executives with incentives. More than 60 per cent of listed industrial and commercial companies with a turnover of more than pounds 5bn reported long-term incentive plans (L-Tips) in which main board directors might be invited to participate.
The maximum award varies greatly, but the overall median is 60 per cent of base salary, rising to 75 per cent for companies with a turnover of more than pounds 5bn.
Three-quarters of the L-Tips are awarded in shares, while earnings per share, share price and total shareholder return are the most popular measures of performance.
Alison Smith, the report's editor, said Monks was able to take advantage of the vast amounts of information about main board directors' pay in annual reports and compare the differentials of a range of directors rather than just chief executives.Reuse content