Top bosses' bonuses 'rise by 187 per cent in ten years'
Monday, 05 September 2011 09:42
The average annual bonus for FTSE 100 directors has rocketed by 187 per cent since 2002, even though share prices have dropped over the same period, a new report has revealed.
According to a study published by the High Pay Commission, average annual bonuses were worth 48 per cent of executives' salary in 2002, but are now worth 90 per cent.
Meanwhile, directors' annual pay packets increased by 64 per cent over the decade, while at the same time the average year-end share price of the UK's most valuable companies plummeted by 71 per cent.
Pay levels for average workers in Britain have risen by 27 per cent over the past ten years, the report added.
"The evidence exposes the myth that big bonuses and high salaries result in better company performances," commission head Deborah Hargreaves commented. "There has been massive growth in what has been termed as performance-related pay, yet no such corresponding leap forward in company performance."
Ms Hargreaves added that changes to pay schemes were masking the real value of executives' salary deals.
"Corporate governance reforms attempting to link pay with performance appear to have done little more than add to the huge complexity of executive packages, reward schemes and bonuses that make up the pay of FTSE 100 directors," she explained.
The Department for Business, Innovation and Skills has said it will examine the report in detail, calling its findings "interesting".
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