Sunday, October 31, 2010

Directors' bonuses on the rise

Executive earnings have reached pre-recession levels, according to new research by Income Data Services.

A revival of bonuses at blue-chip companies has driven final earnings of directors up by 55pc in 2009/2010.

FTSE 100 chief executives earned an average of ?4.9m in the 12 months to June 2010. The average bonus of UK’s directors also rose by 34pc in the same period.

These figures point to an 88pc difference between executive pay and that received by the average full-time worker. At their peak, directors’ pay was 94 times the national average but had dipped since the beginning of the recession.

Criticism of executive pay – especially of those in the banking sector – has following the research as heavy spending cuts and job losses are being experienced by the rest of the country. Politicians in the UK have spoken out against the pay scales of directors. Business Secretary Vincent Cable said the survey was proof that executive pay needed to “come back down to earth”. Labour backbencher Kelvin Hopkins called the bonuses and salaries a “moral outrage”, but said he was “no longer surprised by the excesses of financial capitalism”.

Investors are also likely to call for changes to remuneration as they have, in general, been taking a stricter line on directors’ salaries.

The best paid director across the FTSE 350 was Reckitt Benckiser's Bart Becht who earned ?92.6m, followed by executives at Tesco, Berkeley, Xstrata and BG Group.

The Institute of Directors in the UK said the survey of the FTSE 100 chiefs did not represent the whole private sector, adding it believes the majority of directors have suffered pay cuts in real terms this year.

View the original article here

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