FTSE 100 companies to bolster top bosses’ pay and accelerate reviews
FTSE 100 companies are looking to bolster executive pay and fast-track review periods in a bid to remain competitive with US peers, according to fresh research from Deloitte.
The firm’s report showed 24 of 55 companies that published their annual reports for 2024 have sought shareholder approval for new pay policies. This is up from 16 in the same period last year.
Of the 24 companies, 13 are aiming to “significantly increase incentive levels” or introduce a more “innovative pay structure” – up from nine the previous year.
Those with US operations or strong American competitors have been at the forefront of pushing changes.
The US has long outpaced UK companies on executives’ pay, which has raised concerns about the UK’s ability to compete with those with deeper wallets.
New pay policies have been submitted earlier than usual by 40 per cent of companies, which indicates the drive to enact changes.
Companies ‘engaged extensively’ with investors on changes
Mitul Shah, partner in Deloitte’s Executive Remuneration and Reward practice, said: “This year, a significant number of large global FTSE 100 companies are putting a new remuneration policy to the vote.
“A number of these companies are proposing substantial changes to pay amounts and/or compensation structures, highlighting the need to attract top talent in a competitive global market and address pay compression challenges.”
Shah added that boards were continuing to do what they feel is in the “best interests of their company”.
He added: “There was clear evidence that many companies have engaged extensively with their investors to explain their specific case for support.
“Investors and proxies also appear more open to reviewing proposals on a case by case basis.”
This follows the UK government and Prudential Regulation Authority’s decision to scrap the EU bonus cap, which led to FTSE 100 giants such as Barclays, HSBC and Standard Chartered to ask for bigger payouts for bosses meeting performance targets.
The median pay package of FTSE 100 bosses rose seven per cent to £4.79m for 2024, according to data from Deloitte.