Pay rises for FTSE chiefs will not last
Pay increases for chief executives are set to experience a dramatic fall in the coming year amid fears of a recession, according to to the author of a report.
The news follows a publication of a report today on the remuneration of FTSE-100 CEOs. The survey, by the Monks Partnership – part of PricewaterhouseCooper’s HR practice, revealed chief executive pay had increased by around 14.9% over the year ending June 2001.
Combined with annual bonus payments chief executives have seen a total rise of 16.7% and are now achieving typical annual pay of around Pounds 539,000.
Commenting on the possibility of further increases, report editor David Atkins ruled out the possibility of such high pay hikes being repeated in the coming year.
He said: ‘Pay rises were given in January 2000 and March 2000, and the year before had been very good for industry – they were feeling very good about themselves. It is always dangerous to predict but fears of a recession could put increases back into single figures.’
David Atkins said the reported increase was the outcome of a number of factors over the past year including the merger of companies such as BP and Amoco, and the move of many companies towards a global market.
Atkins pointed to a general ‘shortage of good talent’ as the driving force behind the decision to increase the pay of existing chief executives.
The biggest increase took place in the lowest paid sectors where Atkins said there was ‘a degree of catching up’.
‘Industries such as construction have been doing very well in recent years, however, some roles are transferable across sectors and companies don’t want to run the risk of losing people,’ he said.
The Monks partnership, a consultancy in executive and management pay, was acquired by PwC in July this year.
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