'Fat cat' pay soars again, but now they have to earn it

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The Independent Online

Chief executives at the UK's 100 biggest companies earn an average £616,000 a year when their basic salary, bonuses and benefits are totalled up, according to figures released today. The findings, which are sure to fire the row over "fat cat" pay awards, show that executive chairmen are even better off, earning an average £647,000.

Chief executives at the UK's 100 biggest companies earn an average £616,000 a year when their basic salary, bonuses and benefits are totalled up, according to figures released today. The findings, which are sure to fire the row over "fat cat" pay awards, show that executive chairmen are even better off, earning an average £647,000.

Although boardroom pay is soaring ahead, however, executives' basic salary is being whittled away as a proportion of the total remuneration package, according to Mark Anderson, partner at New Bridge Street Consultants. "Increases in basic salaries are quite clearly being constrained," he said. Big increases were increasingly being delivered through bonuses. "To a greater extent executives' pay is being linked to performance, both by annual bonus schemes and through longer term incentive schemes," he said.

Executives in the information technology sector were found to have the lowest salaries, with the average chief executive's basic pay coming in at £187,000. This compares with £450,000 in the highest-paid resources sector. But IT executives had the highest proportion of their remuneration paid in bonuses, at 62 per cent.

Recent surveys have shown that chief executives' pay in the FTSE 350 rose by 6.5 per cent last year, while at the top 100 companies it was a soaraway 17.6 per cent higher.

New Bridge Street compiled today's new information from the annual reports of 313 of the top 350 listed companies, and the findings show that huge pay packets are not confined to chief executives. In the FTSE 100, finance directors earned an average £372,000, with other executives averaging £363,000.

Chief executives of FTSE 250 companies earn an average £387,000 in total, finance directors earn £241,000 and other directors average £222,000. The proportion paid as performance related bonuses and benefits to executives in the mid-250 is not significantly lower than in the FTSE 100.

Of the 313 companies surveyed, 94 per cent have an annual bonus scheme for executive directors, 89 per cent have a share option scheme and 57 per cent have some other form of long term incentive plan.

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