GREED IS BACK
Row over fat cat pay intensifies as defiant Footsie firms plan bumper hikes for their bosses
THE number of Footsie firms pushing for pay rises for their chief executives has jumped even after the average salary hit £4.5m, a study has revealed.
As the debate about boardroom excess intensifies, the analysis by Deloitte showed that 16 FTSE 100 companies are looking to revamp pay policies this year.
This includes nine that plan to significantly increase the maximum on offer to their boss.
This time last year, just four bluechips were angling for big pay rises, according to the report from the accounting and auditing giant.
The research is based on the first 55 Footsie firms to publish their annual reports this year.
The demands for more generous potential rewards come despite average pay for a FTSE 100 boss jumping 4pc to £4.5m last year.
Boardroom pay has once again become a major issue in the City as companies seek to compete with US rivals where salaries and bonuses are typically higher.
AstraZeneca was last week rocked by an investor revolt as 35pc of shareholders voted against a deal that could see chief executive Pascal Soriot paid as much as £18.7m this year.
The backlash came after influential shareholder advisory groups Glass Lewis and ISS told investors to vote against the ‘excessive’ pay plan at the pharma giant’s annual meeting.
However, the package was ultimately signed off by shareholders thanks to vocal supporters of Soriot, including top shareholder GQG Partners which said he was ‘massively underpaid’.
Over the weekend, AstraZeneca chairman Michel Demare hit out against proxy advisers for ‘double standards’ that ‘do serious harm’ to the competitiveness of British companies,
But it is not just UK pharma that is feeling the pressure over pay. Smith & Nephew is facing its own showdown after sharesholders were last week urged to snub a pay rise for its US-based boss. Under proposals from the London-listed medical equipment group, chief executive Deepak Nath could receive £9.4m next year if he meets targets.
But ISS has slammed it as ‘excessive’ and recommended that investors reject it at next month’s annual meeting.
The London Stock Exchange Group is also looking to convince shareholders later this month over pay for its chief executive David Schwimmer.
Under its plans, he will have the chance to earn twice his current maximum package of £6.25m. Mitul Shah, a Deloitte partner, who advises companies on their pay policies, said the trend of ‘more radical pay proposals’ was down to mounting competition for talent.
He said: ‘Many of these companies have a significant US footprint and cite the disparity in pay levels between the UK and US as a challenge when competing for and retaining senior talent in a global marketplace.’
Mark Austin, a lawyer at global law firm Latham & Watkins, said: ‘If large international Londonlisted companies want to compete for talent globally, they need to be able to offer competitive compensation.’
Leading business figures in the City, including Julia Hoggett, who is chief executive of the LSE Group’s stock market business, are pushing for executives to receive higher salaries. But some have flagged concerns about the growing push for executive pay.
Luke Hildyard, from the High Pay Centre, said: ‘This is obviously good news for chief executives and other high earning professionals. It remains to be seen what benefits it will bring to the rest of the country.’