3 days ago
FTSE 100 bosses rake in a record £550m haul
It may be loose change to Elon Musk, the world's richest man, who has just secured a £22 billion package at his Tesla electric car maker. But make no mistake, the £45.4 million bonanza scooped by Peter Dilnot at aerospace giant Melrose sets a new mark for top pay at FTSE 100 firms.
Dilnot and three other senior executives hit the jackpot after a controversial share-based bonus scheme agreed five years ago paid out in full.
Their bonanza stands out in our annual survey of FTSE 100 boardroom pay that showed the total taken home by top bosses exceeded £500million for the first time.
They netted an average of £5.5million each in 2024, up 11 per cent on the previous year – and more than twice the pace of average earnings growth.
The payouts have prompted a surge in protests by shareholders at firms where the awards are deemed excessive.
The biggest revolt came at Melrose where almost two-thirds of them recently rejected the pay deal in the most serious shareholder rebellion seen so far this year (see table below).
Melrose said it took the snub 'very seriously' and would 'consider the feedback received'. 'The board has set a new remuneration policy, fully aligned with FTSE 100 peers', a spokesperson added.
It's not just at Melrose that share owners are kicking up a fuss over ballooning boardroom pay.
The number of significant shareholder protests has more than doubled so far this year compared with a year ago, with 11 FTSE 100 companies seeing revolts of more than 20 per cent, according to research firm Indigo Governance.
Most of the pushbacks were over executive pay.
At Centrica 40 per cent of investors voted against the British Gas owner's pay report (see table).
Chief executive Chris O'Shea, who took home £4.3 million, said last year it was 'impossible to justify' his pay while customers were struggling to pay soaring energy bills.
Companies are obliged to report back to shareholders within six months if more than a fifth of share owners oppose a pay plan under rules to curb so-called 'fat cat' pay introduced when Theresa May was Prime Minister.
The idea was that 'naming and shaming' firms would curb executive excess.
Instead, boardroom pay has continued its inexorable climb. For some this is still not enough as they are looking to increase the maximum payouts that bosses can earn. For example, Tadeu Marroco at tobacco giant BAT could see his pay treble to £18 million if performance targets are hit, while Emma Walmsley at drugs giant GlaxoSmithKline could double hers to £22million.
London-listed companies increasingly compare themselves with their US peers, where rewards are bigger and tolerance of sky-high bonuses higher.
What that argument conveniently overlooks is that many US companies are better run and make more profit than their UK counterparts.
And crucially, many chief executives of US companies combine the role with that of chairman, meaning they have more responsibility – and more pay.
Money transfer firm Wise recently followed in the footsteps of plant hire giant Ashtead, gambling group Flutter and Tarmac-owner CRH in moving their main stock market listing to New York to secure higher valuations. Even drugs giant AstraZeneca and oil titan Shell have flirted with the idea, though the London market received a boost last week when miner Glencore abandoned plans to leave the City.
Bernadette Young, director of Indigo Governance, says the trend of London-listed firms to look enviously across the pond is 'undoubtedly a concern for the economy and British business'. But she adds: 'Excessive levels of executive pay can be hard to justify at a time when lower-paid colleagues within a business may be struggling with the cost of living.'
Melrose completed a dubious hat-trick by also coming top of the pay gap league, which measures the difference between what a boss earns and what their firm pays a typical worker.
Astonishingly, Dilnot was paid 1,112 times more than the £53,000 received by the average Melrose employee (see left).
It means he made more in a few hours than the rest of his workforce is typically paid all year.
On average the High Pay Centre think-tank reckons top chief executives are paid 113 times the median full-time worker's pay of £37,430.
Some of the biggest pay gulfs are in retail, a sector where low wages are common and the cost-of-living squeeze is keenly felt.
Next, M&S and JD Sports were targeted by a coalition of investors managing over £1 trillion in assets at their annual meetings this year.
Led by campaign group ShareAction, the firms were urged to disclose how many of their staff and contract workers were paid below the real living wage of £12.60 an hour.
In each case a significant minority of share owners voted in favour of the fair pay resolution. Ruan Opie-Meres of ShareAction said: 'All three companies have signalled a willingness to improve their transparency and continue to talk.'
Additional research provided by Anne Ashworth and Simon Kupfer
GSK boss Emma Walmsley is still highest paid female
Despite suffering a £2 million pay drop, GlaxoSmithKline's Emma Walmsley is again the highest-paid FTSE 100 female boss.
But the drug giant's chief executive could be in line to double her pay to almost £22 million under a deal to align it more with US peers such as Moderna and Merck.
Walmsley has led GSK since 2017 and the group, which is known for its cancer drugs and vaccines, employs 65,000 staff.
This mother-of-four is also on the board of tech giant Microsoft and was made a Dame in 2020 for her contribution to the pharmaceutical industry.
At number two in the pay stakes is Aviva's Amanda Blanc. She has been at the helm of the insurance giant since 2020, having recently led the takeover of Direct Line.
She also sits on the board of BP and played a key role in the recent appointment of its new chairman.
Blanc's pay has attracted criticism but nothing compares to the row over water bosses' pay.
The two biggest suppliers are run by women – Liv Garfield at Severn Trent, who got £3.3 million, and Louise Beardmore of United Utilities, who got £1.7 million.
In one of its last acts before being scrapped, regulator Ofwat slapped bonus bans on six suppliers, including United, because of their pollution record.
It means Beardmore will not receive a £417,000 bonus that she was awarded, and which is included in our pay figures.
