Bonuses are back for the FTSE 100
by Peter Wozniak
Executive bonuses have risen to the levels experienced before the financial crisis hit in 2007, a survey by Deloitte has shown.
FTSE 100 companies’ executive bonuses were on average at 100% of salary, while for the top 30 firms, the figure was even higher at 140% of salary.
The survey does sound a cautionary note, arguing that while bonuses have increased back to pre-crisis levels, executive salaries have not followed.
Stephen Cahill of Deloitte said: “Now it appears that the years of executive salaries increasing at rates far in excess of inflation and the increase in average earnings are, at least for the moment, well and truly over.
“Companies are now recognising that increases for executives must be considered fair and reasonable in the context of current business circumstances and the pay and conditions for employees more generally.”
It has been the second year in a row that many executives’ wages will be frozen, with fully half of the FTSE 100 companies to issue no pay increase in 2010.
The survey also stressed that there is a substantial dropping off of bonus payments below the top 100, with FTSE 250 executives likely to see their bonuses go down rather than up.
However, the caveats will do little to assuage public anger over the apparent return of the ‘bonus culture’.
With drastic public spending cuts on the way, any sign that executives bonuses are on the rise are likely to reignite the arguments that were initially began over banks paying out large bonuses even after receiving bailout funds from the taxpayer.
