|
GUARDIAN |
||
|
|
Special report: Executive pay |
|
|
|
Executive pay shoots up by 28%
Jill Treanor, deputy city editor, Guardian Wednesday August 29, 2001 Britain's top bosses enjoyed a 28% pay increase last year –
six times more than the average wage rise. According to the Guardian's annual survey of directors'
pay by compensation consultants Inbucon, more than 140 executives at FTSE-100
companies took home at least £1m last year. Four executives were paid more
than £1m just for leaving their companies. The highest paid director is Martin Read, chief executive
of technology company Logica, whose total take home package of more than £27m
was largely the result of a performance-related incentive deal. Robin Saxby, chairman of ARM holdings, and two other executives
from the microchip designer he founded in Cambridge, earned nearly £50m between them after
exercising share options in the company. The figures have been calculated by examining the annual reports
of all the companies in the FTSE 100 and noting the pay, bonuses, share
options exercised, and long-term incentive plans of all executive directors. The executives at the top of the league have made most of
their money by cashing in on sophisticated performance-related schemes made
up of complicated packages of shares and options - at a time when many of the
companies they run are starting to tighten their belts in preparation for an
economic downturn. Marconi, the electronics company formerly known as GEC,
paid its chief executive Lord Simpson £1m, even as 10,000 of its employees
around the globe lost their jobs. Allen Yurko, who is resigning as chief executive of
Invensys, has also made 6,000 staff redundant, but himself earned more than £800,000.
Sir Christopher Gent, the high-profile chief executive of Vodafone,
whose pay deals regularly court controversy, earned £9m, the survey found. He was rewarded the largest year-on-year pay rise - some
400% - of all the executives covered by the research, despite running one of
the companies which produced some of the poorest returns for shareholders. The survey shows that men dominate Britain's boardrooms, a
feature which the government's workplace equality tsar, the lawyer Denise Kingsmill, today pledges to
address. Just one woman, Melanie Lee, the low-profile research director of Celltech,
which offered the best returns for shareholders by one measure, makes it into
the millionaire's row. Marjorie Scardino, the only woman to run a FTSE-100
company, publisher Pearson, suffered a £1.5m drop in her take home pay. The survey combines the salary and bonuses paid to the executives
in the FTSE-100 blue chip index in cash as well as sums they received through
long-term incentive plans and options. The year-on-year rise produced by the Guardian-Inbucon
research is even greater than some other surveys of directors' pay, possibly
because it calculates how much executives actually took home through
performance related deals which ran their course during the year. Even the rise in base salary of 22%, which is less
controversial to calculate, still demonstrates that wage rises in the
boardroom comfortably outstrip the average. According to government statistics, average pay rises
totalled 4.8% in June. In the year to end-December, the average wage rise was
5%. The survey shows the aver age compensation for a director
is just under £1m. This compares with average annual earnings of £17,880 for
all full- and part-time workers in the UK. One of the surprises in this year's survey is the finding
that even with the sharp fall in stock markets, directors were still able to make
gains on their options over shares awarded in previous years. The survey calculates that a collective £198m was made by directors
from their options, compared with £87m in 1999.
|