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FTSE 250 CEOs earn average salary of £1.8m

Executives at FTSE 250 companies have seen basic salaries and bonuses rise since last year

Shafi Musaddique
Thursday 02 November 2017 01:04 GMT
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FTSE 250 companies are taking significant steps to reward executives with shares in exchange for loyalty
FTSE 250 companies are taking significant steps to reward executives with shares in exchange for loyalty (Rex)

Bosses of the UK’s FTSE 250 companies earned an average basic salary of £1.8m last year, which was 11 per cent more than they did in 2015, according to a new report.

Professional services firm Deloitte said on Thursday that the average total pay package for the chief executives of the index – including salary, pension, bonuses and other incentives – rose by 7 per cent.

Finance directors for those firms saw their total compensation package increase by 4 per cent on the same figure last year.

A Deloitte report in August showed that FTSE 100 bosses were paid an average of £3.5m in 2016, which marked a 19 per cent fall from 2015.

“A strong performance from FTSE 250 companies over the last 12 months has led to a rise in executive pay” said Mitul Shah, an executive pay specialist at Deloitte.

He also said companies using other FTSE 250 firms as a benchmark for executive pay could be inflating executive pay.

“The FTSE 250 is so diverse that benchmarking figures may not appropriately match, and this could be leading some firms to increase payouts”.

According to the report, FTSE 250 companies are increasingly rewarding chief executives with share-based pay outs, which can be as high as 200 per cent of basic salary, in a bid to retain them.

The report also found that FTSE 250 companies are taking significant steps to bolster the link between executive pay and the performance of shares.

Deloitte said that 56 per cent of companies on the index now require executive directors to hold shares with a value of at least 200 per cent of their annual salary. Back in 2016, only 40 per cent of companies had that requirement, the firm said.

Transparency over executive pay has also improved at FTSE 250 companies, according to Deloitte.

A total of 59 per cent of companies have publically disclosed targets used to assess how much executives should receive in bonuses. That’s up from 48 per cent in 2016.

The FTSE 250 is the index of the biggest publicly-listed firms that are not large enough to make it into the FTSE 100 of blue-chip companies.

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