The latest IDS report shows that top Directors earnings increased by 14% in the last year while average earnings fell in real terms. The CBI has been noticeably quiet today about the need for public sector pay restraint!
The big increase came with a 58% rise in the value of vested long-term incentive plans (LTIPs) – share-based schemes linked to shareholder returns, but even basic pay increased by 4%. In contrast, average earnings across all sectors grew by 2.1% and have fallen in real terms for most of the past five years. Even more so in the public sector.
The median salary was £568,500, annual bonus £553,200 and vested LTIP awards £1.2bn. However, most listed companies’ annual accounts do not include vested share awards in the main table detailing with directors’ pay, making it difficult to spot. That will change with new reporting requirements.
Frances O’Grady, General Secretary of the TUC, said: “It’s one thing replacing bonuses with long-term incentive plans, but FTSE 100 companies are simply exploiting this change to make their fat cats even fatter. The time has come for legislation to put ordinary workers on the pay committees of companies. This is the only way to bring some sanity to the way in which directors are paid.”