Chief executives are still receiving bonuses of more than £500,000 even though the payouts have fallen by almost a third in the past year, according to new research today.
Incomes Data Services said the 29% slump was the largest setback in the growth of bonuses paid to leading bosses over the last decade. But the pay analysts said shareholders may question whether bonus schemes were sufficiently challenging because of the current level of payments despite the scale of the recession.
As bonuses dipped, FTSE-100 chief executives received salary increases several times the rate of inflation, averaging 7.4% in the past year, said the report. Average bonus payments fell from £707,000 in 2007/08 to £502,000 in 2008/09, according to research.
When falls in bonuses were offset against salary increases, average earnings for FTSE 100 |directors fell by just 1.5%.
Chief executives were still earning as much in 2009 as they were in 2006 when the economy was booming, said the report.
Steve Tatton of IDS said: “In previous downturns growth in bonuses slowed, but for bonuses to shrink, and by a third, is highly unusual. But what is also surprising is that the credit crunch, which led to some of the biggest rescue rights issues in living memory, has had so little impact on the rate at which chief executives' salaries are rising.”