UK’s top bosses see pay increase again - KPMG

The guide includes an overview of salary, pension, bonus and long-term incentives as well as insights into diversity across the executive population, alongside other current issues affecting remuneration.

The KPMG findings show that:

• The median basic salary for chief executives rose by 2 per cent in 2018 while one in five received no salary increase
• Annual bonus – around a third of executive directors in the FTSE 350 received annual bonuses of over 80 per cent of the maximum opportunity
• Long term incentives – median awards were 250 per cent and 180 per cent of basic salary for chief executives for FTSE 100 and FTSE 250 companies respectively.
• Regulatory – the most important change to remuneration rules affecting UK listed companies was the publication of the updated UK Corporate Governance Code in July 2018. The new Code signals a wider remit for remuneration committees and envisages a greater role for the use of discretion in over-riding formulaic outcomes.
• Shareholders – the average votes in favour of the annual remuneration report and policy report remained above 90 per cent across the FTSE 350, despite 2018 being known for some high-profile cases.
• Diversity – only 8.4 per cent executive director positions are held by women. Of those, 51 per cent are Finance Directors and 31 per cent are chief executives.

Eddie Norrie, associate partner and head of People Services for KPMG in Scotland, said: “We have seen a significant increase in media, investor and regulatory pressure bearing down on Remuneration Committees this year. We have also witnessed a growing unease from the investor community when it comes to executive pay with little expectation this trend will reverse in 2019. Against this backdrop, many committees may well be reassessing their policies, both in terms of their complexity and the quantum of reward they may deliver.”