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Period of non-exec pay rises comes to an end

FEES for non-executive directors in FTSE 100 have begun to fall for the first time since 2009, according to a new report by PwC.

The median base fee level for FTSE 100 non-executive directors is £61,000 in 2013, a slight drop from 2012 where the median was £64,000. This follows five years of increases from a base of £55,000 in 2009.

Fees in FTSE 250 companies have continued to rise over the same period.

Fiona Camenzuli, partner in PwC’s reward team, said: “As with executive pay, companies are keen to show restraint in non-executive directors pay by ensuring any pay rises are not out of kilter with their wider employees.

“The new reporting regime will put further pressure on fee levels for non-executive directors as companies will now have to establish and disclose their policy on fees, which will be subject to a binding vote. Any increases that are inconsistent with the approved policy will be unlawful.”

The fees for chairmanship and membership of the remuneration committee for FTSE100 companies have jumped 65% and 140% respectively since 2009. This takes the median fee for a remuneration committee member from £5,000 in 2009 to £12,000 in 2013.

The median fee for chairing the remuneration committee now stands at around £20,000 per annum in the FTSE100, up from £12,000 in 2009; the same level as audit committee chairmanship fees, which remained at £20,000 per annum for a third consecutive year.

“It is clear that chairing the remuneration committee is now considered as onerous as chairing the audit committee. The intense spotlight on executive pay means the remuneration committee chair has an extremely difficult balancing act between setting pay levels which satisfy shareholders, company executives, the wider workforce and often the general public,” Camenzuli said.

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