The average pay package of a FTSE 100 (^FTSE) boss fell last year, as investors cracked down on bloated corporate pay deals.
The median package for a top CEO fell to £3.4m ($4.1m) in 2018, according to analysis by Deloitte, down from £4m a year earlier. The figure includes base salary, bonuses, and any other payments.
It marks the lowest average pay-out for the UK’s 100 top bosses in the last five years. A rule change in 2014 meant companies were forced to disclose a single pay figure. The greater transparency appears to have led to pressure to crack down on big CEO pay packages.
Almost a third of FTSE bosses received no increase in their base salary last year and the average increase in pay was just 2% for those who did see a rise.
The decline in average pay packages comes amid continued pressure from shareholders and the public over excessive executive pay.
House builder Persimmon last November sacked its CEO Jeff Fairburn because the board concluded his £76m bonus was damaging the firm’s reputation. Fairburn was the highest paid FTSE 100 CEO last year, with a base package of £38.9m.
More recently banks have been forced to defend the pension arrangements of CEOs, many of whom receive cash payments in lieu of pensions that are seen as back-door pay top-ups.
“We are seeing continued evidence that investors expect the same standard of disclosure and engagement on pay across the UK market,” Stephen Cahill, vice chairman at Deloitte, said.
“In particular, we are seeing pressure from investors for improved transparency around bonus plans, as well as an expectation that remuneration committees will apply judgment and discretion where pay-outs are not considered to reflect the shareholder experience.”
A study at the start of the year found that FTSE 100 CEOs earn around 133 times as much as their average employees.