The median increase to base salaries for FTSE 100 chief executive officers in 2016-2017 is 2%, according to research by Fit Remuneration Consultants.
Its FTSE 100 directors’ remuneration report, which is based on data collected from FTSE 100 organisations’ annual reports and accounts with a year end up to and including 31 December 2016, also found that the median salary for a chief executive officer at a FTSE 100 organisation is £855,000 for 2016-17, compared to £850,000 in 2015-2016.
The median base salary for chief financial officers increased by 2.5% from £533,000 in 2015-2016 to £544,000 in 2016-2017.
The research also found that 32% of chief executive officers in the FTSE 100 did not receive a base salary increase, compared to 23% of chief financial officers.
Median annual bonuses for FTSE 100 chief executive officers decreased from £1,093,000 in 2015 to £1,057,000 in 2016. The median target annual bonus, which is a percentage of annual base salary, for chief executive officers at FTSE 100 organisations increased to £848,000 in 2016-2017 from £829,000 in 2015-2016.
Median single figure total remuneration, which includes salary, taxable benefits, pension, annual bonus paid, long-term incentive plan vestings, and any other form of remuneration received during the year, was £3,543,000 for FTSE 100 chief executive officers in 2016, compared to £4,404,000 in 2015. For chief executives with a service of three years or more, this figure fell from £4,539,000 in 2015 to £3,737,000 in 2016 on a median basis.
The median value of long-term incentive plans vested to chief executive officers at FTSE 100 organisations fell from £2,074,000 in 2015 to £1,578,000 in 2016.
John Lee (pictured), managing partner at Fit Remuneration Consultants, said: “2016-2017 has been a busy year for remuneration committees, institutional investors and proxy guidance services as 63% of the FTSE 100 have been required to put their remuneration policy to vote during the 2017 [annual general meeting] season. Despite much discussion on alternative models of pay, we continue to see much homogeny in pay structure across the FTSE 100. A significant number of [organisations] considered changing their structures but, following feedback from shareholders during the consultation process, decided not to proceed.
“This has resulted in 95% of [organisations] operating a standard long-term performance share plan arrangement. However, pressure to comply with shareholder friendly features such as five years until the full release of shares under long-term incentive arrangements, 200% share ownership guidelines and bonus deferral has resulted in 62% of new policies incorporating all three of these, increasing the percentage of the FTSE 100 which incorporate all three features from 29% to 44%.”