Pay Increase Creates Unrest For Top UK Execs
Top UK executives have received pay increases of up to 32% causing public outrage.
- (1888PressRelease) July 06, 2011 - UK chief executives have received large pay increases that, reportedly, do not correspond to the performance of their company. A report into the matter, conducted by MM&K and manifest, has shown that whilst top executives of the FTSE 100 received on average pay increase of 32% to £3.5 million, the FTSE 100 index rose just 9%.
The top earner in the FTSE 100 was ICAP exec Michael Spencer who raked in a £23.7 million bonus, with Xstrata mining executive Michael Davis taking home a cool £21.2 million. It is exactly these types of statistics that has angered trade unions and share holders as they believe they are not seeing the rewards they expect.
The report has additionally found that whilst some shares have not increased, bonuses for top executives can have increased four-fold. Many are against this form of reward-based pay and believe bonuses should be related to company performance.
Public sentiment, however, will no doubt be clouded by high levels of unemployment, pay cuts, redundancy and falling levels of expendable income. In stark contrast to FTSE 100 execs, the average UK pay packet rose on average just 2%.
The report has also been published at a time when HSBC shareholders are outraged over the high levels of pay top executives have recently received. It has been reported that 20% of HSBC's shareholders are opposed to HSBC's remuneration scheme for top executives.
It is however, not completely fair to judge these colossal bonuses by British standards. It can be argued the FTSE 100 companies earn their money globally, and on the most part outside of the UK. When you consider top executives pay increase under these factors it becomes evident that they are available for hire across the globe and their pay packets are a reflection of their employment status.
Whether or not the giant pay increase is justifiable with regards to company performance is another matter, with the FTSE 100 share prices lower than they were just over a decade ago. Shareholder outrage would indicate it is not.
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