The pay of FTSE 100 chief executives surged by £560,000 (€654,620) to an average of almost £5 million last year, rebounding to levels not seen since 2017.
The figures come as UK executives push for higher pay-outs to compete with international rivals, particularly in the US, where company bosses are paid significantly more.
The rise in average pay was driven by “a small number of companies making really large pay awards rather than big increases across the board”, said Luke Hildyard, director at the High Pay Centre think-tank, which compiled the data.
The number of companies on the blue-chip index paying their bosses more than £10 million rose from four in 2022 to nine in 2023.
Median pay rose more modestly from £4.1 million to £4.19 million, according to the High Pay Centre’s analysis of company disclosures, though this was still the highest since 2009, the earliest year for which it has collected the data.
AstraZeneca chief executive Pascal Soriot remained the highest-paid FTSE boss with total pay of £16.9 million, up from £15.1 million a year earlier.
Erik Engstrom and Charles Woodburn — the heads of Relx and BAE Systems — were each paid more than £13 million.
Rolls-Royce boss Tufan Erginbilgiç received similar remuneration but this included a once-off £7.5 million share award, which will not fully vest until 2028, to compensate him for shares he forfeited when he joined from his previous private equity job.
Soriot’s pay could rise again this year as AstraZeneca in recent months joined large UK-listed groups such as London Stock Exchange Group and Smith & Nephew in winning shareholder backing for higher executive pay packages.
LSEG boss David Schwimmer said in February: “If London has an ambition to be a globally leading financial centre and to attract world-class companies, that means it has to attract world-class talent.”
The analysis covers chief executives’ entire pay packages, including salary, bonuses, pension and incentive plans.
Companies argue that the majority of executives’ pay comes from bonuses and share awards linked to performance. Relx’s share price has risen about seven-fold since Engstrom took over in 2009, for example.
But the figures will be seized on by opponents of high pay, with the median FTSE 100 chief now paid 120 times the median full-time British worker, according to the High Pay Centre.
Hildyard blamed the gap on “the decline of trade union membership, low levels of worker participation in business decision-making and a business culture that puts the interests of investors before workers, customers, suppliers and other stakeholders”.
“These developments have been very good for those at the top, but it is more questionable whether they are in the interests of the country as a whole,” he added.
The UK’s new Labour government has pledged to make it easier for unions to gain statutory recognition and improve their rights to access workplaces to organise and recruit.
GSK chief executive Dame Emma Walmsley’s remuneration of £12.7 million made her the highest-paid woman.
The median pay for the six companies that had female chief executives for the whole year was just under £2.7 million, compared with almost £4.2 million for men. – Copyright The Financial Times Limited 2024
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