LONDON — Average pay for chief executives of FTSE 100 companies fell by almost 20% over the past year, according to a report by auditor Deloitte.
CEOs’ median pay fell 19% between 2015 and 2016, from £4.3 million to £3.5 million, and the size of the bonuses they received also fell.
At the same time, median salaries across the companies surveyed rose by about 2%.
“The fall in executive pay demonstrates that remuneration committees are making a real effort to address shareholders concerns,” said Stephen Cahill, Deloitte vice-chairman. “It seems to show that the current legislation is working,” he said.
In 2013 the law changed, and firms must now be more transparent about how much top employees are earning, as well as hold a shareholder vote on pay every three years. Prime Minister Theresa May also promised to do more to address executives’ pay and the widening pay gap when she ran for the Conservative leadership last year.
Deloitte’s report is consistent with the High Pay Centre’s findings from earlier this month, which showed that pay for FTSE 100 executives fell by almost a fifth between 2015 and 2016. However, executives’ salaries “still remain extraordinarily high,” and it would take an average UK full time worker on the average salary (£28,000) 160 years to earn what an average FTSE 100 CEO is paid every year.
In July, a third of Burberry’s shareholders voted against the company’s pay report, while nearly 60% of oil giant BP’s shareholders voted against a 20% jump in Chief Executive Bob Dudley’s pay in April.
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