Half of FTSE firms flout pension rules

As anger builds over obscene retirement perks . . .

MORE than half of British bluechip firms are under fire from shareholders over the massive pension deals handed to bosses.

As many as 54 companies in the FTSE 100 have been handing chief executives cash payments worth at least a quarter of their salary every year towards their retirement.

Some chiefs receive a pension top-up worth more than a third of their salary – with Tui chief executive Friedrich Joussen handed £489,000 a year, or 51pc of his basic pay.

This flouts tough new guidelines from the powerful Investment Association that state pension payments should be worth no more than 24pc of salaries.

And for new chief executives the figure should be in line with what staff receive – typically below 15pc.

The IA – which represents the City’s major investors who manage more than £7trillion of assets – looks set to issue a string of warnings over companies breaching the code.

It sets the scene for major investor rebellions as companies put their pay schemes to shareholders at annual general meetings in the coming weeks.

IA members include Schroders, Legal & General, Invesco, Prudential, Aviva and Aberdeen.

Andrew Ninian, corporate governance director at IA, said: ‘Members have been clear this is an issue of fairness and pension contributions should be aligned with the majority of the workforce.’

Luke hildyard, of the high Pay centre, said: ‘With vast pay awards, top bosses would rake in much higher pension payments than ordinary workers, even if they were paid on the same terms.

‘But most chief executives receive a much bigger proportion of their salary. Such blatant double standards leave a sour taste in the mouth of ordinary workers.’

Most chief executives get a cash lump sum every year towards their pension, calculated at a specific percentage of their salary.

Unlike regular staff members – whose funds are locked away until they retire – they can invest this cash in the market or spend it as they would with normal pay.

Research for the Mail shows that in 2017 a total of 54 FTSE 100 businesses paid their bosses contributions of 25pc or more.

Major offenders include Ross Mcewan at bailed-out Royal Bank of Scotland, who gets 35pc or £350,000 of his £1m base pay; Pascal Soriot, of drugmaker Astrazeneca, who picks up 30pc or £375,000 of his near £1.3m salary; and Ivan Menezes at drinks firm Diageo, who gets 30pc or £351,000 of his £1.2m wage bill.

Others receiving 30pc or more include Rakesh Kapoor of Reckitt Benckiser, Marco Gobbetti of Burberry and Mike Coupe of Sainsbury’s. The IA crackdown has triggered panic in boardrooms, with some already announcing pension payments will be cut.

At Aviva, contributions for chief executive Maurice Tulloch were cut from 28pc to 14pc when he was promoted to the job this month, in line with other staff.

But other firms have been accused of trying to get around the guidelines.

Lloyds faces backlash after it cut boss Antonio horta-Osorio’s pension payments to 33pc of his salary or £419,000 – still more than the IA limit. It also increased his other fixed pay by £175,000, offsetting the cut. The IA has warned tricks to boost pay will not be well received.