FDs cash in on relentless rise in pay

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Despite calls from shareholder pressure groups to curb fat cat pay, the UK’s top FDs have benefited from further hikes in pay levels.

Exclusive research by our sister publication Financial Director found an average CFO salary increase of 6.5% among the FTSE100, five times the level of inflation.

‘Too many institutional investors approve schemes leading to unmerited increases,’ said Alan MacDougall, managing director of Pensions Investment Research Consultants.

He said salary hikes needed to be linked to more tangible benchmarks such as sector performance.

MacDougall also expressed the need for a more realistic criteria of business performance and more rigorous control of contracts. ‘We need every company to disclose executive remuneration going forward,’ he said.

Salaries could be boosted further as head-hunters launch a scramble for talent as almost a third of FTSE100 finance directors approach retirement.

Of the country’s top 100 companies, 31 employ finance directors aged 50 or over. Suzzane Wood, head of the CFO practice at headhunters Heidrick & Struggles, said it was increasingly important for large companies to have good ‘succession planning’ in place to ensure a smooth transition of top executive roles. ‘Corporate governance is asking for succession planning,’ said Wood.

October alone saw five FTSE100 FDs preparing to step down, and some of the companies facing potential problems in finding replacements.

David Richardson, FD of Whitbread, will leave in April next year, but no replacement has been announced. ‘The interviews are taking place, and we are confident that we will have someone in place by then,’ a spokeswoman said.

A spokesman for the National Association of Pension Funds said it encouraged companies to ‘make sure they justify executive remuneration’. ‘We don’t want Real Madrid pay packets and Sheffield Wednesday performance,’ he said.

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