Chief executives of FTSE 100 companies still receiving £½m bonuses, report finds

Oct 27 2009 by Graeme Brown, Birmingham Post

Chief executives are still receiving bonuses of more than £500,000, even though the payouts have fallen by almost a third in the past year, according to new research.

Incomes Data Services said the 29 per cent fall was the largest setback in the growth of bonuses paid to leading bosses in a decade.

But the pay analysts said shareholders may still question whether bonus schemes were sufficiently challenging because of the level of payments despite the scale of the recession.

As bonuses dipped, FTSE 100 chief executives received salary increases several times the rate of inflation, averaging 7.4 per cent in the past year, said the report.

Average bonus payments fell from £707,000 in 2007/08 to £502,000 in 2008/09, according to the research. But when falls in bonuses were offset against salary increases, average earnings for FTSE 100 directors fell by just 1.5 per cent.

Steve Tatton of IDS said: “In previous downturns growth in bonuses slowed, but for bonuses to shrink, and almost by a third, is highly unusual.”

“But what is also surprising is that the credit crunch, which has led to some of the biggest rescue rights issues in living memory, has had so little impact on the rate at which chief executives’ salaries are rising. Salaries for FTSE 100 chief executives are rising twice as fast as salaries for shopfloor workers.”