According to a survey by PwC, FTSE350 executives have seen their bonuses fall for the second year in a row and one in ten received no bonus at all in 2013.
PwC’s annual executive pay survey of large UK companies reveals that around one in five of FTSE100 and 15% of FTSE250 chief executives have seen pay freezes in 2013. Total pay (salary, bonus, long-term incentives and pension) has been largely static across FTSE 350 senior management positions. Where salary increases have been given, they have been roughly in line with inflation at an average of 3%, which is consistent with 2012 levels.
Where bonuses were awarded to FTSE 100 chief executives, the average (median) payout was £905,000. This is a 7% fall from 2012 where the median was £975,000. This means FTSE100 chief executives received on average just over two thirds of maximum payout. This is a drop from the high in 2011, where bonus payouts were typically over three quarters of the maximum.
Senior management and executives
The survey shows that senior management and executives below board level in the FTSE 100 have seen the largest drop in annual bonus payments, with bonuses as a percentage of maximum payout have falling from 70% in 2012 to 62% in 2013.
PwC data indicates that FTSE350 companies are planning minimal changes to pay levels next year, with most budgeting pay rises of between 2.5% and 3.5% for all management levels.
Tom Gosling, head of PwC’s reward practice, said:
‘It is unsurprising that following a bruising 2012, companies have been keen to avoid the spotlight by demonstrating a responsible approach to executive pay this year. Restraint is the name of the game, with relatively few changes to pay plans this year.’
Gosling admits that the short term outlook for pay is hard to predict, but stresses the importance of a link between pay and performance: ‘Companies have heard loud and clear from shareholders that bonuses and pay rises that are not closely linked to performance are unacceptable. ‘
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