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| Directors' pay jumps 14% in year thanks to share incentives | Directors' pay jumps 14% in year thanks to share incentives |
| (about 1 hour later) | |
| Total pay for the directors of the UK's top businesses rose 14% over the past year driven by a huge jump in share-based long term incentive payments, a pay research company has found. | Total pay for the directors of the UK's top businesses rose 14% over the past year driven by a huge jump in share-based long term incentive payments, a pay research company has found. |
| Incomes Data Services ((IDS) said this took the average pay for a director of a FTSE 100 firm to £3.3m. | Incomes Data Services ((IDS) said this took the average pay for a director of a FTSE 100 firm to £3.3m. |
| IDS said basic pay rises were "relatively restrained" at 4% higher, while annual bonuses fell 8.8%. | IDS said basic pay rises were "relatively restrained" at 4% higher, while annual bonuses fell 8.8%. |
| But total pay rose thanks to a 58% rise in share-based long-term incentives. | But total pay rose thanks to a 58% rise in share-based long-term incentives. |
| And over the past ten years, the median total earnings of a FTSE 100 chief executive has gone up by 243%, Steve Tatton, editor of IDS's directors' pay report, told the BBC. | |
| Mr Tatton said the survey illustrated the "complex make-up of boardroom remuneration". | |
| "With nearly two-thirds of FTSE directors benefiting from an LTIP [long-term incentive plan] award in the latest year, the higher share-based payouts clearly made up for any ground lost in lower annual bonuses," he added. | "With nearly two-thirds of FTSE directors benefiting from an LTIP [long-term incentive plan] award in the latest year, the higher share-based payouts clearly made up for any ground lost in lower annual bonuses," he added. |
| A director is typically awarded a proportion of their salary in shares, which pay out only if the director hits their performance targets. | |
| Mr Tatton told the BBC that the long-term incentive plans were generally awarded three years in advance, with the results from this survey reflecting decisions made in the 2009-2010 financial year when share prices were much lower. | |
| "The alternative may be happening now, with directors being granted fewer shares under that type of formula," Mr Tatton said. | |
| TUC general secretary Frances O'Grady said the survey's findings meant that top bosses' pay was growing 20 times faster than that of the average worker. | TUC general secretary Frances O'Grady said the survey's findings meant that top bosses' pay was growing 20 times faster than that of the average worker. |
| "It's one thing replacing bonuses with long-term incentive plans, but FTSE 100 companies are simply exploiting this change to make their fat cats even fatter," she said. | "It's one thing replacing bonuses with long-term incentive plans, but FTSE 100 companies are simply exploiting this change to make their fat cats even fatter," she said. |