Fat cats award themselves 49% pay rises
Directors of UK's largest companies have awarded themselves payrises of 49% in the last financial year, according to research from Income Data Services.
This includes bonus payments, which have risen by 23% from £737,624 in 2010 to £906,044 in 2011.
While the majority of employees have had to endure pay freezes, the information and research service reveals that FTSE 100 directors' pay packets - including salary and benefits - are on average worth nearly £2.7 million a year.
Chief executive officers (CEOs) have seen their total pay increase by 43.5% to £3.8 million a year; finance directors on average earn just over £2 million a year – after a 34.1% increase to pay, while more junior directors have seen their total pay increase by 66.5% to £2,260,033.
Steve Tatton, author of Income Data Services' report, says these figures indicate "a marked improvement in boardroom fortunes" but warns employees will find them hard to take.
"At a time when employees are experiencing real wage cuts and risk losing their livelihoods, without further explanation it may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors."
In comparison to the large percentage changes for boardroom bosses, average UK total pay has increased by just 2.8% over the last year, according to the Office for National Statistics. And the average working wage in the UK is £25,900.
TUC General Secretary Brendan Barber says the difference in pay rises highlights the need for reform: "Boardroom pay rewards are a brazen stitch-up. Reform should start with employee representation on remuneration committees, which would give directors a much-needed sense of reality.
"With the FTSE 100 down on last year and most staff getting pay rises of less than 2% these bumper settlements prove that CEO pay bears no resemblance to performance or economic reality.
"Top directors have used tough business conditions to impose real wage cuts, which have hit people's living standards and the wider economy, but have shown no such restraint with their own pay," Barber adds.
A market-weighted index of the 100 biggest companies by market capitalisation listed on the London Stock Exchange. It is often referred to as “The Footsie”. The index began on 3 January 1984 with a base level of 1000; the highest value reached to date is 6950.6, on 30 December 1999. The index is “weighted” by how the movements of each of the 100 constituents affect the index, so larger companies make more of a difference to the index than smaller ones. To ensure it is a true and accurate representation of the most highly capitalised companies in the UK, just like football’s Premier League, every three months the FTSE 100 “relegates” the bottom three companies in the 100 whose market capitalisation has fallen and “promotes” to the index the three companies whose market capitalisation has grown sufficiently to warrant inclusion. Around 80% of the companies listed on the London Stock Exchange are included in the FTSE 100.