ThisisBigBrother.com - UK TV Forums - Top executives' earnings up 27%

http://www.bbc.co.uk/news/uk-20216031

Quote:

Senior executives in the UK's biggest companies have seen their average earnings go up by more than a quarter in the past year.

New research suggests the bosses of top firms made an average of £4m a year.

But Incomes Data Services, which compiled the figures, says pay and bonuses have hardly risen at all.

Instead the increase is due to a rise in value of long term incentive plans which have replaced cash bonuses.

The study looked at the earnings of directors of the 100 largest companies quoted on the London stock exchange, in the 12 months to June.

It showed that increases in basic pay and bonuses slowed almost to a halt - with pay rising in line with inflation, and bonuses falling.

However, earnings still increased by an average of 27%, largely due to the introduction of long term, share-based incentive plans for executives.

These plans - which are now used by 90% of top companies - are designed to match bonuses more closely to the return that shareholders make, says BBC business correspondent Jonty Bloom.

But since many started in the depths of the recession, executives have benefited as the stock market overall has bounced back, our correspondent adds.

Incomes Data Services said many executives were benefiting from the recent overall improvement in stock market performance.

It meant that the value of long term investment plans had risen to an average of £938,000 for directors, and to £1.6m for chief executives.

NB:

The study also pointed out that the plans were often calculated based on a firm's performance in comparison with its competitors, rather than its own performance history.

This meant that an executive might still be rewarded if the company's performance had deteriorated, as long as competitors had done worse.

Top execs keep a win-win situation ..... :rolleyes: