FTSE 100 chief executives’ pay soars by 22% in a year despite cost of living crisis

Analysts say rise ‘primarily’ driven by bonus payments as pay now “largely back to pre-pandemic levels”

Matt Mathers
Monday 07 November 2022 16:38 GMT
Resurgence of the FTSE 100

The average pay of FTSE 100 chief executives rose by some £700,000 to £3.9m in the past financial year, according to new analysis.

The rise was primarily driven by an increase in annual bonus payments and pay is now “largely back to pre-pandemic levels”, PriceWaterhouseCoopers (PwC ) said.

It comes as workers in both the private and public sectors brace for below-inflation pay rises amid the cost of living crisis, with bills and mortgage costs rising.

Nurses are expected to go out on strike in a row over pay and conditions and rail workers have taken industrial action on multiple occasions this year.

Average salary of FSTE 100 CEO climbs to £3.9m
Average salary of FSTE 100 CEO climbs to £3.9m (Getty Images/iStockphoto)

According to PwC, the professional services and accounting giant which analysed FTSE CEO pay, the past financial year also saw a decrease in the proportion of CEOs with salary freezes, down from 43 per cent in 2021 to 15 per cent in 2022.

The majority (58 per cent) received a percentage salary increase for 2022 in line with, or below, the workforce level, while 38 per cent awarded an increase below that of the wider workforce.

Analysts at the firm said average annual bonuses for 2021/22 increased to 86 per cent of the maximum opportunity, which was “above historical pre-covid levels.”

The increase is in part driven by a post-Covid boom in some sectors, and in some cases, due to performance targets that were conservatively set in 2021 to reflect greater market uncertainty.

Only 5 per cent of FTSE 100 CEOs received no bonus for 2021/22, down from 22 per cent in 2020/2021, PwC said.

Andrew Page, executive compensation leader at PwC UK, said: “The increase in executive pay and bonuses highlights that FTSE 100 companies were boosted by businesses opening up and demand returning after the pandemic.

“However, looking forward to the 2023 AGM season, higher pay outcomes are likely to be met with greater investor scrutiny, particularly in the context of rising inflation and pay increases across the workforce.”

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