Salaries of FTSE 100 chiefs should be slashed according to shareholder advisory group
Salaries of FTSE 100 chief executives are “too high” and should be slashed by more than half, according to shareholder advisory group ShareSoc.
The group’s report into executive remuneration also said that bonuses and long term incentive plans, which boost pay packets by up to 200% and 300% respectively, should be “less than half of these amounts”.
The report comes amid renewed shareholder anger over executive pay. Shareholders in oil giant BP recently voted to reject its remuneration report, which included a pay deal of 19.6 million dollars (£13.8 million) for chief executive Bob Dudley.
Mining giant Anglo American has also faced investor protests after 42% of shareholders voted against chief executive Mark Cutifani’s £3.4 million pay package for 2015.
ShareSoc chairman Mark Northway said: “We are deeply concerned by the continuing trend towards excessive and unnecessary CEO remuneration.
ShareSoc has therefore developed simple, equitable guidelines, which we would like to see adopted by listed companies as an integral component of their governance framework.”
The organisation wants large businesses to cap executive bonuses and long-term incentive plans at 100% of salary. It also railed against “remuneration creep”, flagging that executive pay has tripled over the last 18 years while the value of the FTSE 100 share index has “barely increased at all”.
It also recommends that share options should be an element in remuneration packages, adding that “a meaningful portion of share incentives must be held to retirement or beyond”.
The £70 million pay package awarded to WPP boss Sir Martin Sorrell is set to come under scrutiny at the company’s AGM in June.