Median pay for a FTSE 100 chief executive rose 11% in 2017, according to new research.
The median pay for a CEO in the top 100 companies has now reached £3.93m per year, according to research from the High Pay Centre and CIPD, the professional body for human resources professionals.
In a forward to their joint report, Luke Hildyard of the High Pay Centre, and Charles Cotton, CIPD’s senior advisor on performance and reward, said there had been considerable pressure for lower pay from government and regulators.
“In this context, we might have expected greater downward pressure to be exerted on top pay by remuneration committees and shareholders.
“The new changes introduced as part of the corporate governance code, such as the strengthened requirement to consider executive pay awards in the context of pay practices throughout the organisation and the increased role for stakeholder voice in governance structures, will add impetus in this respect.
“However, our findings strengthen our conviction that more meaningful change to policy and practice are needed in order to achieve full stakeholder confidence in executive pay practices.”
Professional services firm Deloitte recently released research which revealed that investor revolts against company remuneration reports had risen. The firm showed that 22% of companies received less than 80% support for their remuneration reports in the current voting season, compared with only 6% last year.
Though the pay figures appear to counter the trend of investor opposition to high pay, the numbers were tilted by large payouts to chief executives at Persimmon (£47.1m for CEO Jeff Fairburn) and Melrose (£42.8m for CEO Simon Peckham).
The report says that excluding these exceptional settlements would still reveal a rising trend in mean executive pay of 6% year-on-year.
The pay report notes that the mean pay ratio between FTSE 100 CEOs and the mean pay package for an employee is 145:1, up on 2016’s 128:1 and 146:1 in 2015.
The High Pay Centre and CIPD make a series of recommendations to achieve “fairer and more ethical approaches to pay”. These include a beefed-up role for remuneration committees (remcos) in ensuring CEO pay is “aligned with pay practices throughout the organisation.”
There is also a call for remcos to include non-financial measures in the assessment of CEO performance.