Top pay rises fast

Earnings and share-based rewards for the FTSE 350 directors have grown rapidly in the last 10 years, outstripping company performance as performance-related pay has become an increasing factor in pay packages, according to the High Pay Commission.

Earnings and share-based rewards for the FTSE 350 directors have grown rapidly in the last 10 years, outstripping company performance as performance-related pay has become an increasing factor in pay packages, according to the High Pay Commission.

Its report, What are we paying for? Exploring executive pay and performance, shows that for FTSE 100 top executives’ bonuses were worth 90% of their salary in 2010, compared with 48% in 2002.

The increase in bonuses has not affected salary rises, which have increased by 63.9% over the last 10 years.

The grant of shares that top executives can access has risen. In 2002, the median maximum grant of shares that a FTSE 100 lead executive could be awarded was 100% of their salary. In 2010, this rose to 200% of their salary.

Other increases which increased earnings included a rise in the average value of Long Term Incentive Plan (LTIP) awards paid out to lead executives across the FTSE 350, which has gone up over 700% since 2000.

Discussing the growth of performance-related pay Deborah Hargreaves, chair of the High Pay Commission, says: “We have found that this has added to complexity in pay packages, and increased pay hugely yet there is no real corresponding increase in corporate performance.”

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