Directors' pay surges 49% at London's top listed firms: data
Boardroom directors at London's top listed companies have seen earnings soar 49 percent on average in the last financial year thanks to soaring bonuses, independent research showed on Friday.
Directors are now averaging total pay of almost £2.7 million (3.1 million euros, $4.4 million) outpacing a 43-percent earnings hike last year for chief executives heading FTSE 100 companies, according to Incomes Data Services.
Directors have enjoyed a 23-percent increase to £906,044 in their 2011 bonuses, offsetting stable basic salaries, IDS said according to annual accounts for the year to April.
"At a time when employees are experiencing real wage cuts and risk losing their livelihoods, without further explanation it may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors," said the report's editor, Steve Tatton.
"The pay gap between the boardroom and the shop floor does not yet show any signs of closing."
The IDS Directors' Pay Report comes amid a British inquiry into large boardroom pay by the independent High Pay Commission.
HPC chair Deborah Hargreaves said in response to Friday's report: "I think it is very hard to justify these sorts of pay increases when we have seen companies' share prices go down, profits down, companies laying off staff, and when average wages are going up 1-2 percent, not even keeping up with price rises.
"I think performance-related pay doesn't really work. We have lots of studies looking into it and it has a very marginal effect," she told BBC radio.
But Martin Sorrell, chief executive of advertising firm WPP, launched a strong defence of executives' remuneration.
"Look at what chief executives of media companies are paid in other parts of the world. We are a worldwide company, we are the leading company in our industry, the comparison, whether you like it or not, is with other companies in the world," he told the same radio programme.
Among the other companies traded on the FTSE 100 are Europe's biggest bank HSBC, energy giant BP, pharmaceutical titan GlaxoSmithKline, mining behemoth Rio Tinto, mobile phone group Vodafone and luxury clothing firm Burberry.
© 2011 AFP