FTSE 100 chief executives have seen their salaries slashed to their lowest level in five years. The UK’s biggest companies are reacting to investors applying pressure on companies to reduce huge salary pay outs to CEOs. According to a Deloitte analysis of tax filings in the latest season of annual meetings, an average salary pay was £3.4million for the last financial year.
The number was down from £7.4 million – a cut of £4million – for the same period in the previous year.
It is the lowest median pay rate recorded since 2014, when companies were required to provide a single figure for a total salary.
The greater transparency is said to have led to pressure to crack down on big CEO pay packages.
There has been a number of revolts taking place in the boardrooms of companies in the financial sector.
Investors are ordering FTSE 100 companies to review the salaries of chief executuves
There has been a number of revolts taking place in the boardrooms of FTSE 100 companies
At Standard Chartered, more than a third of the firm’s shareholders voted against the bank’s pay policy.
This was because investors were showing concerns over the chief executive’s pension allowance.
They attacked Mr Winters’ pension of £474,000 — or 40 per cent of his cash salary — saying it was too high.
The under-fire chief, who last week learned the company would be fined £10million for failing to prevent breaches on sanctions imposed on Iran, told the Financial Times investors were being “immature”.
Persimmon’s Jeff Fairburn made headlines for his high pension package
He said: “Picking on individual pension arrangements and suggesting that there is some big issue there is immature and unhelpful.”
The board considered asking Mr Winters to take a pay cut after the bank’s largest shareholder put pressure on directors to close down the row.
Other companies have also experienced protests over the amount of money paid to chief executives.
These include Barclays, De La Rue, Ocado, Hammerson and Standard Life Aberdeen.
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FTSE 100 chief executives have seen their salaries slashed to their lowest level in five years
Investors are putting pressure on companies to regulate pension and salary payouts
Some companies, including Lloyds and Aviva, had already taken steps to address the discontent shown by their investors.
Stephen Cahill, vice chairman at Deloitte, said: “Since the introduction of the 2014 reporting and voting regime, we have seen renumeration levels stabilise and a significant shift in the simplification of pay packages.”
Shareholders have come under pressure to tackle the problem of chief executive salaries.
This came after politicians and regulators caught wind of large-scale packages paid out to Martin Sorrell of WFF and Persimmon’s Jeff Fairburn.
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One big British shareholder told the Financial Times: “Pay has become a big issue.
“We are never going to be able to put that genie back in the bottle.”
Research conducted by Deloitte found that nearly one third of FTSE 100 chiefs did not receive any increase in base salary,
The average increase in pay was just two percent for those who did see a rise.
Previously, investors were showing concerns over the StanChart’s chief executive pension allowance
Meanwhile, bonus payouts were similar to the previous year at a median level 70 percent of an individual’s salary.
But the most notable change was to incentive plans.
Only 5 percent of FTSE 100 companies now operate more than one long-term incentive plan.
This is compared to five years ago, when almost half of the companies listed on the exchange offered more than one long-term incentive plan.
Deloitte also found investors are taking aim at FTSE 250 companies. They highlighted concerns that smaller companies were failing to embrace the corporate responsibility being shown by larger companies in the top 100.