Monday, 14 September 2009

£36.8m. Not bad for a year's work.

Despite the current recession which has led to FTSE 100 companies losing almost a third of their value, executives at Britain's top companies saw their basic salaries leap by 10% last year. The most highly paid chief executive was Bart Becht of Reckitt Benckiser who received £36.8m in pay, bonuses, perks and share incentive schemes.

The Guardian's annual survey of boardroom pay reveals that the average chief executive of a FTSE 100 company now earns a basic salary of £791,000. However, adding bonus payments, share awards and the value of perks (which range from cars and drivers to school fees and dental work), the average pay package rises dramatically. Nearly a quarter of FTSE chief executives received total 2008 pay packages in excess of £5m, and 22 directors now have basic salaries of more than £1m.

Liberal Democrat Treasury spokesman Vince Cable called such pay deals "breathtakingly cynical," while Brendan Barber of the TUC commented that "it looks depressingly like we are going back to 1980s greed-is-good politics."
  • What are the arguments that FTSE companies would use to justify the salaries of their chief executives?
  • Is it justifiable to award significant salary increases to the CEO of an organisation that has seen its share price slide over the last 12 months?
  • Look at the example of Bart Becht. Is any individual (whether an international footballer, film star or businessman) worth £37m per year?
  • Compass have called on the government to establish a High Pay Commission to curb excessive pay. Look at their campaign statement and consider how they would respond to the Guardian survey results.
  • Update for Teachers : Since this article was first posted, the Guardian has added a "datablog" of background information on the salaries of the top FTSE 100 Chief Executives. There's a wealth of data to explore and analyse, including comparisons of the salaries of CEOs with that of the average employee within the company. Enjoy the gasps of amazement!


  1. Is any individual (whether an international footballer, film star or businessman) worth £37m per year? Erm, NO!

  2. Harriet

    I hereby award you this weeks prize for brevity, wit and correctness expressed in the lowest number of syllables!