The average salary of CEOs in the FTSE 100 skyrocketed by £560,000 (€654,620) to nearly £5 million in the last year, echoing rates not witnessed since 2017. The data suggesting this salary rise emerges as UK executives attempt to fight for higher compensations in order to match with their international counterparts, particularly those in the US where the remuneration for corporate leaders is quite substantial.
Luke Hildyard, the director at the High Pay Centre, believes that the increase in mean pay was due to a handful of firms doling out hefty salaries, rather than industry-wide increments. The think-tank’s gathered data shows that the count of blue-chip index corporations paying over £10 million to their bosses has more than doubled, growing from four in 2022 to nine in 2023.
There was a more humble ascent in median pay, stepping up from £4.1 million to £4.19 million. However, the High Pay Centre’s analysis from company records points out that this is still the highest median pay since their data collection began in 2009.
Pascal Soriot, the CEO of AstraZeneca, retains his position as the top-earning FTSE executive with a total pay packet of £16.9 million, a significant increase from his £15.1 million remuneration the previous year. Additionally, the CEO’s of Relx and BAE Systems, Erik Engstrom and Charles Woodburn respectively, also made more than £13 million.
Rolls-Royce CEO, Tufan Erginbilgiç, has a slightly different remuneration structure. His compensation included a unique £7.5 million share award designed to rectify the forfeiture of shares from his past private equity employment. The shares, however, will not fully materialise until 2028.
Backing from shareholders for larger executive pay packages for groups such as AstraZeneca, London Stock Exchange Group and Smith & Nephew could lead to Soriot’s pay escalating further in the coming year.
In order to attract top-tier talent, the CEO of LSEG, David Schwimmer, said in February that a globally leading financial centre like London must offer competitive compensation packages.
A breakdown of a typical CEO pay includes elements like salary, bonuses, pension and incentive plans. Many firms maintain that a significant part of an executive’s pay packet is derived from bonuses and share awards contingent on performance: For instance, since Engstrom took over in 2009, Relx’s share price has multiplied seven times.
Those opposing significant salaries will likely leverage the statistics indicating that the average FTSE 100 leader’s pay is 120 times that of the average full-time worker in the UK, as noted by the High Pay Centre. Hildyard attributes this disparity to a decrease in trade union membership, nominal worker involvement in business choices and a corporate culture that prioritises investors over workers, clients, suppliers and other stakeholders.
He adds that though the rising income gap has benefited the elite, it’s debatable whether it serves the general interests of the nation. The newly-elected Labour government in the UK has committed to enhancing the ease of obtaining legal recognition for trade unions and boosting their rights to access workplaces for organisation and recruitment purposes.
Dame Emma Walmsley, CEO of GSK, emerged as the highest salaried woman with her £12.7 million remuneration. For the calendar year, the six companies with women CEOs had an average compensation of nearly £2.7 million, whereas the figure was almost £4.2 million for male counterparts. This is copyrighted information as of 2024 and belongs to The Financial Times Limited.