CEOs grab 16 per cent pay rise

Company chief executives have increased their pay by a total of 15.8 per cent in the latest year, thanks to large increases in bonus payments. A survey of the pay of 43,000 executives in 180 UK organisations reveals a growing gap between pay packages for chief executives and those for all other groups, including other managers.

Key points

  • Overall, executives' basic salaries plus bonuses rose by 3.0 per cent on average over the last 12 months, in line with a 3.0 per cent increase the year before and trailing behind retail price inflation.
  • In contrast, although the average basic salary for all company directors increased by just 2.7 per cent, the figure jumped to 5.3 per cent when bonus payments were accounted for. This compares with a much smaller 2.1 per cent salary plus bonus rise for directors between 2011 and 2012.
  • Similarly, chief executives' basic salaries increased by just 1.8 per cent: but when bonuses were added in, the percentage increase jumped to 15.8 per cent. In stark comparison, comparable figures for the previous year showed a salary plus bonus decrease for chief executives of 0.5 per cent.

A spokesperson for the Chartered Management Institute, which carried out the survey with XpertHR, commented: 'It’s hard to believe that company directors and CEOs have seen such a big leap in bonus payments when the UK’s economic performance remains so sluggish. If organisations aren’t performing, leaders shouldn’t get these bumper rewards, especially when pay increases for all other management levels have been so much smaller'.

The TUC added: 'Ordinary people are suffering the biggest squeeze on their incomes in almost a century, but families' financial pain is not being shared by their top bosses who have huge bonuses to cushion them against any drop in their living standards'.

Source
Four Decades in Management Pay: The 2013 National Management Salary Survey, Chartered Management Institute/XpertHR
LinksReport | CMI press release | XpertHR press release | TUC press release

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