Directors at Britain's top 100 companies picked up 10 per cent more pay last year despite taking home smaller bonuses.
Total earnings across the index reached a median of £1.95m, according to figures from Incomes Data Services. This was driven by a rise in the value of long-term incentives plans (L-tips), which climbed 81 per cent to a median of £938,888 while bonuses fell 4.9 per cent to a median of £605,000.
Steve Tatton, the author of the report, said: "While shareholders will be pleased to see more traditional elements of pay seemingly slowing, these figures show that directors' earnings can still grow significantly as a result of a complex mix of incentives.
"Many L-tips are based on comparative perf ormance with competitors, rather than their own company's historical performance, meaning that directors stand to earn a payment even if their company's performance has worsened – as long as their chosen peer group has done even worse."
Pay figures are particularly sensitive this year because of the shareholder spring, which resulted in reprimands for some of Britain's best-known companies over excessive pay and even high-profile job losses.
Stephen Hester, Royal Bank of Scotland's chief executive, claimed the row over his near-£1m bonus in January was the "catalyst" for the investor revolts.
Mr Hester, pictured, said the furore over his bonus, which he eventually waived, contributed to a spate of investor revolts at companies including Aviva, Trinity Mirror and WPP. Andrew Moss, Aviva's former chief executive, lost his job in May following an embarrassing shareholder revolt which saw 59 per cent of shareholders fail to back the company's executive pay plans.
Mr Tatton added: "Whether a reaction to Government pressure, shareholder concerns or a worse than expected business environment, it seems the brakes have been applied to the basic pay growth for FTSE 100 bosses.
"Shareholders will not take issue with directors' earnings increasing, provided they are doing so in line with company performance and share price."
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