Average FTSE 100 pay has climbed from £4.13m in 2010 to £4.96m today, reflecting the lack of progress made in reducing the pay gap between those in high-ranking executive positions and those in low and middle-income earning positions.
Under the previous coalition government, new proposals were brought into place meaning shareholders would have more power when it came to blocking “excessive” pay proposals – as well as payments for failures. The then business secretary Vince Cable unveiled a four-fronted approach including: greater transparency; more shareholder power to hold companies to account; more diverse boards and renumeration committees; and best practice led by the business and investor community. However, while shareholders do now have the power to voice opposition to pay policy at annual general meetings (AGMs), the average vote against pay awards across the FTSE 100 only stands at 6.4 per cent. High Pay Centre director Deborah Hargreaves said: “Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives. It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest. “The coalition government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket. However, it’s clear that these reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.” Read more about executive pay:- Companies urged to think long-term when setting executive pay
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- More than 75 per cent FTSE 100 amended remuneration arrangements
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