Chief exec remuneration falls during the pandemic

Big company bosses are earning less today than they were before the onset of the pandemic.

Despite taking a 17% pay cut, FTSE 100 chief executives earned 86 times the average full-time wage last year.

The latest pay data from the High Pay Centre shows the median pay for a CEO of an FTSE 100 firm was £2.69 million last year.

In 2019, before the onset of the pandemic, average pay was £3.25 million.

Also falling was bonuses for top company bosses, falling from an average of £1.1 million in 2019 to £828,000 in 2020.

And the average long-term incentive plan payment fell too, declining from £2.4 million in 2019 to £1.38 million in 2020.

Luke Hildyard, director of the High Pay Centre, said:

“CEO pay packages are designed to reflect the experience of shareholders, employees and other stakeholders so in one sense the lower pay levels this year show the system working as intended.”

However, Hildyard also explained that most FTSE 100 bosses have already earned millions of pounds by this stage of their careers, with significant financial rewards still to come, at a time when government financial support has been more important to the survival of businesses than CEO leadership.

The High Pay Centre also looked at the average CEO earnings at the nine FTSE 100 businesses that took advantage of the furlough scheme, which stood at £2.39 million.

Compared to top executive pay in other European countries, the UK demonstrated a wider gap between the rich and poor.

The highest-earning FTSE 100 chief executive last year was Pascal Soriot at AstraZeneca, earning £15.45 million.

In the second place, Brian Cassin from Experian, the credit reference agency, made £10.3 million.

Third place went to building materials company CRH boss Albert Manifold, earning £9.92 million.

Offering a different opinion to the High Pay Centre, the Adam Smith Institute argued that chief executive pay fell when the role of the FTSE 100 CEO was incredibly valuable.

Matthew Lesh, head of research at the Adam Smith Institute, said:

“Amid a historic global crisis the captains of industry have played a key role in keeping us fed, entertained and connected.

“Investors are known to react viciously to changing CEOs because leadership is key to business success.”