Average FTSE chief executive pay tops £3 million a year

A report by MM&K and Manifest has revealed that the average FTSE 100 company chief executive is still taking away in excess of £3 million a year despite a significant drop in profitability over the last two or three years. This is a perfect reflection of the ongoing battle between institutional shareholders and company directors which has seen the likes of Marks & Spencer and Tesco rebuffed regarding remuneration packages and bonuses.

There is growing concern of an imbalance between shareholder value and remuneration in the FTSE 100, an issue which is certain to hit the headlines more and more in the short to medium term. As we have mentioned on numerous occasions, in the good times when everybody was making money and shareholders were happy to see profits grow year-on-year there were no major issues but as the recession hit home and remuneration packages failed to reflect the changing economic environment this is when problems have arisen.

It will be interesting to see how company directors react to this latest revelation and whether indeed we see bonuses and remuneration packages cut back in the short to medium term. If there is no realignment of remuneration packages there could be problems ahead for company directors.