Bosses 'worth' wages of 127 staff

The average pay of FTSE100 chief executives jumped 40% in the past year to nearly £3m, according to a report from the pay experts.

The average pay of FTSE100 chief executives jumped 40% in the past year to nearly £3m, according to a report from the pay experts.

Senior City figures say the figures for the first time laid bare how, after three years of more modest rises, executive pay was once again spiralling out of control.

In a survey of the available annual accounts of 87 companies, the average total remuneration of a FTSE100 chief executive has risen to £2,864,282.

The figure includes salary, bonuses, share options and other long-term incentive plans that have vested during the year.

But it excludes valuable pension contributions, which would raise the average total remuneration to more than £3m.

With the average UK salary now approximately £22,500, FTSE100 chief executives take home the pay of 127 workers. In contrast, shares in the FTSE100 index have climbed by just 7.5% over the past 12 months after a year of strong profits growth.

But the widespread granting of bonuses for what is often called "on-target" performance has attracted particular criticism, including from those at the top of British business.

Philip Hampton, the chairman of J Sainsbury and a former finance director of BT, BG and Lloyds TSB, said: "When I started earning bonuses you had to have a fabulous performance to get one. Now you can pick one up for something quite pedestrian - just doing what is expected."

The 2006 edition of the IDS Directors Pay Report, which will be published in three weeks' time, reveals how such bonuses have fuelled an ever-increasing gulf between Britain's boardrooms and the average worker.

In 2001 the average chief executive's total remuneration stood at £1.7m, equivalent to the annual earnings of 90 workers.

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