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|9th October 2004||UK Boardroom pay rises gallop ahead|
|Article - UK Boardroom pay rises gallop ahead|
The pay gap between the boardroom and the workforce is continuing to widen, according to an annual report.
Over the year to 30 June 2004, the average total earnings received by directors of the UK's 350 leading firms rose by 16.1%, the study found.
Yet the average total earnings of all employees increased by only 4.3% over the 12 months, according to Income Data Services' Directors' Pay Report 2004.
Shareholder campaigns have attempted to curb bloated boardroom pay awards.
The IDS survey found that the directors of FTSE 350 companies today have an average salary of £213 for every £100 of wages paid to them in 1998.
By contrast, managers and professionals are getting £127 for every £100 of salary they earned in 1998.
The survey found that bonuses and share options have helped fuel the increases over the past year.
While basic salaries for FTSE 350 directors rose by an average 9% during the 12 months covered by the report, the total cash they received - which also takes bonuses into account - increased by 16.1%.
Among the blue-chip firms listed on the FTSE 100 index, an average pay package for a chief executive consists of a salary of £625,000 ($1.1m) and total earnings of more than £1.19m.
Across the FTSE 350, the average value of directors' annual bonuses paid in the year ending 30 June 2004 was 76% of salary, or a 12.2% increase on the previous 12 month's 63.8%.
The apparently widening pay gap comes despite a number of high profile campaigns in recent years against so called 'fat cat' pay, and successful shareholder rebellions that have seen leading firms such as Tesco and GlaxoSmithKline reduce pay outs to their top directors.
The UK government has called for large investors to take a more active role in preventing a company setting excessive overall pay deals or remuneration packages for its top directors.
Steve Tatton, editor of IDS Executive Compensation Review, said greater involvement by institutional investors in shaping remuneration policies did not as yet appear to be lowering pay.
"If the government hoped that more involvement by investors would dampen down boardroom excess, then the expectation has turned out to be misplaced," he said.
"This is partly because the intent behind the drive for greater corporate governance has always been ambiguous," he said.
"It is not clear whether the aim is simply to prevent corporate abuse or to curb top pay deals."
The report also reveals that not all company directors have seen their pay packages increase.
At leading sports retailer JJB Sports, for example, its executive chairman voluntarily waived 59% of his annual salary.
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