Top bosses’ pay up 15%

Fancy an annual salary of £4.27 million? All you have to do is get to be the chief executive of a FTSE 100 company, and you are in with a chance – as that is their average pay. It’s 15% up on last year and stands in sharp contrast to most employees, who have had pay cuts in the form of below inflation rate rises over last years or, in many cases, out and out pay freezes. An employee on the average salary will have to work a whole year to take home what an average top boss can pick up in two days. This is one of the clearest indicators that under the Con-Dem Coalition, inequality in the UK has widened.

Top of this year’s list is Sir Martin Sorrell of WPP (an advertising company). Investor research company Manifest calculated that this highest earning FTSE 100 executive trousered £29.8million last year, if you add up his basic pay, pensions and long-term bonuses. His shareholders were so shocked at the figure that just under a third of them refused to endorse the pay package (so two thirds of them, then, were unphased at the idea of a £30 million annual salary).

He must be a darned special Chief Exec, as he took home almost three times as much as the second placed boss, Donald Robert of the shadowy financial investment firm Experian (£10.1million) and nearly four times as much as Tidjane Thiam, who walked off with £8.6million in return for chief executiving the Prudential, the life insurance and financial services multinational.

Manifest’s calculations take in not only the basic monthly salary of your FTSE chief exec, but also all the hidden bonuses and extras. The company points out that some remuneration is given in shares, so it is worth more if the stock exchange rises, as has been the case recently. Manifest has done a parallel calculation which shows that if you don’t count the increased value of remuneration contributed by stock market growth, the bosses’ pay was much less – a 7% cut, in fact. However, as the stock market has grown and the chief execs can get the higher value for their shares, in practice they will be able to coin in the higher sums.

The public debate on these high remuneration packages has varied widely. Around the East End, most people’s contribution is “Blimey!”, followed by hysterical laughter as we try to imagine such excesses. However, even the establishment is getting a bit twitchy about how high the figures are when you add up all the pieces of the package. In response, it seems that the top companies are now looking for ways to restrict how much they have to publish – aiming to make the figure for basic pay the only one released to the public. They’re probably getting those valuable top brains to work out how to do it. If they find one, perhaps they will get a (non-declarable) bonus.