Unions attack executive 'greed' as board pay soars

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The Independent Online

The gap between the pay of a FTSE 100 company's chief executive and that of one of their shopfloor workers has widened to its highest level this decade, figures showed today.

Chief executives earned on average 98 times more than the average for all UK full-time workers, Incomes Data Services said. Unions lambasted the pay surge as a sign of "greed not performance".

The pay gap has more than doubled since 2000 when the pay of the leaders of the UK's top companies was "just" 39 times the average worker's earnings.

The total pay package of a FTSE 100 chief surged by 43 per cent from £2.01m in 2005 to £2.98m in 2006. The compared with the average wage deal of just 3 per cent.

Since 2000, their total earnings have more than doubled compared with a 28.6 per cent rise for the average full-time worker.

Most of the total remuneration came as long-term incentives and share options. The basic salary of a CEO made up a quarter at £730,796. But basic salaries for CEOs of FTSE 350 companies rose 9.1 per cent.

However, IDS acknowledged that the scale of public and media disapproval was much less than in the mid 1990s, when the pay levels were much lower.

"Committees and their advisers have found that the best way to avoid any potential pitfalls is by making sure major shareholders are on board before any changes are put to a vote," it said.

The report showed a shift towards performance-related bonuses, which are easier to defend than simply rises in the basic salary.

While salaries of FTSE 100 directors have risen by about 50 per cent since 2000, annual bonuses were up more than 150 per cent. The median average salary - a measure less distorted by very high numbers at the top end - of FTSE 100 lead executives was £716,000.

Brendan Barber, general secretary of the TUC, said: "It is hard not to conclude that this further huge rise in executive pay is more about greed than performance. No one should now have any illusions that executive remuneration has been brought under control.

"Giving shareholders a vote on boardroom pay has failed to rein in excess, as remuneration committees have simply found new ways to keep pushing up pay."