The latest research from accountants Deloitte has uncovered a substantial increase in the average pay of top executives in the UK. According to the analysis, FTSE 100 chief executives saw their pay and benefits rise to nearly £5.9 million last year, marking an 18% surge from the previous year. This increase is significantly higher than the average wage growth for UK workers.
TUC General Secretary Paul Nowak criticized the average pay rise of £900,000 as “frankly obscene.” Deloitte’s examination of 55 FTSE 100 companies revealed that a considerable number of them are seeking approval for new pay policies that could result in substantial increases in bonuses for executives, averaging 200% of their salary, contingent upon meeting performance targets.
Moreover, some companies are reducing the importance of environmental, social, and governance criteria in determining executive bonuses. The move to boost executive pay comes amidst pressure in the City for UK companies to remain competitive globally, especially against counterparts in the US and private equity firms.
Despite the surge in executive pay, many UK families are grappling with a cost of living crisis. Notable examples of executives receiving substantial pay increases include the boss of Next, whose pay packet soared by over 50% to £7.4 million, and the head of AstraZeneca, whose total compensation reached £17.7 million.
Mitul Shah from Deloitte highlighted the trend of companies revising variable pay structures to attract and retain top talent in a competitive market. The ongoing review of executive remuneration packages underscores the need for companies to stay competitive on a global scale.
Calls for addressing excessive executive pay have intensified, with concerns over pay inequality and corporate greed. The High Pay Centre emphasized the need for government intervention to address the widening pay gap and consider measures to curb corporate excess.