Rises in executive pay begin to slow

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The Independent Online

Business Editor

The row over British Gas pay and the Greenbury report have helped to moderate pay rises at the top of British industry, according to a survey by Bacon & Woodrow, the actuaries.

Chief executive salary increases have slipped back compared with a year ago, but there has been less impact from the furore on the pay rises of other board members.

Keith McNeish, introducing the survey, said: "The Cedric Brown effect - the pressure on senior executives pay - has embarrassed companies a little in terms of their most highly paid individual."

He believed that all the talk about telephone number salaries was persuading remuneration committees to say: "Let's peg the man at the top", even if they had to carry on paying the rest of the board above the rates of other people.

The survey also found a "spectacular" increase in the number of people expecting to retire at 60 rather than later. This has risen from 55 per cent to 77 per cent. Mr McNeish said it would be interesting to know whether this reflected the fact that people found the heat of the kitchen too strong and wanted to get out.

The survey found total board salary packages among 731 people at 102 companies, including benefits and bonuses, rose 8 per cent, but those of chief executives rose only 5.6 per cent. This narrow differential was the most significant finding of the survey.

The average main board director now receives a basic salary of pounds 123,470 with benefits and bonuses taking the total to pounds 212,556. Chief executives' average basic salary is pounds 228,738 with a total remuneration package averaging pounds 399,318.

Bacon & Woodrow found 27 per cent of top executives had received no merit increase on basic salary and the average increase was 5 per cent - compared with 7 per cent last year. However, 20 of the sample received more than 20 per cent and another 17 between 15 and 20 per cent. Last year the comparable figures were 30 and 42, suggesting a moderation of the extreme increases.