Chief executive pay back in spotlight after 11% increase
The average pay of FTSE 100 chief executives rose by 11% last year despite the continued pressure from shareholders and activist investors.
Analysis by the Chartered Institute of Personnel and Development (CIPD) showed the median pay for FTSE 100 chief executives was £3.93m last year, up from £3.53m in 2016. It said the increase for UK workers was just 2%.
The median average – which takes the middle value in the list – has been used to avoid the distorting effects of two very large payouts at West Midlands’ engineering group Melrose and York housebuilder Persimmon.
Simon Peckham, chief executive of Melrose Industries, which completed its takeover of GKN earlier this year, received £42.8m while Persimmon boss Jeff Fairburn was paid £47.1m.
Their earnings pushed the mean average for FTSE 100 chief executives up to £5.66m, a rise of 23% on the previous year.
Peter Cheese, chief executive of the CIPD, said: “Despite increased investor activism and the planned introduction of pay ratio reporting, the evidence suggests that very little is changing when it comes to top pay in the UK.
“It’s disappointing to see that CEO pay has held up in the face of increasing pressure when average pay across the workforce has barely shifted in recent years. However, pressure is building in the system.”
The HR industry group also found bosses were paid on average 145 times more than their employees – up from 128 times in 2016.
