Greed is back: Footsie firms plan huge hikes for their bosses

The number of Footsie firms pushing for pay rises for their CEOs has risen even after the average salary hit £4.5m, a survey has found.

As the debate over excesses in boardrooms intensifies, Deloitte analysis shows that sixteen FTSE 100 companies are looking to review their remuneration policies this year.

Among them are nine who plan to significantly increase the maximum offer to their boss.

This time last year, only four blue-chip companies were looking for big pay increases, according to the accounting and auditing giant’s report.

The research is based on the first 55 Footsie companies to publish their annual reports this year.

The demand for more generous potential rewards comes despite the average pay for a FTSE 100 boss rising 4 percent to £4.5 million last year.

Boardroom pay has again become a major issue in the city as companies try to compete with US rivals, where salaries and bonuses tend to be higher.

AstraZeneca was rocked by an investor revolt last week when 35 percent of shareholders voted against a deal that would see CEO Pascal Soriot pay as much as £18.7 million this year.

The backlash came after influential shareholder advisory groups Glass Lewis and ISS told investors to vote against the “excessive” compensation plan at the pharma giant’s annual meeting.

However, the package was eventually signed off by shareholders thanks to Soriot’s outspoken supporters, including top shareholder GQG Partners, who said he had been ‘vastly underpaid’.

Last weekend, AstraZeneca chairman Michel Demare spoke out against proxy advisers over ‘double standards’ that are ‘severely damaging’ the competitiveness of British companies.

But it’s not just British pharmaceutical companies that are feeling the pressure on wages. Smith & Nephew is facing its own confrontation after shareholders were urged last week to reject a pay rise for the US-based boss.

Under a proposal from the London-listed medical device group, chief executive Deepak Nath could receive £9.4 million next year if he meets targets.

Beneficiaries: AstraZeneca boss Pascal Soriot, left, and London Stock Exchange chief David Schwimmer, right, are among those in line for big pay rises

But ISS has branded it ‘excessive’ and recommended that investors reject it at next month’s annual meeting.

The London Stock Exchange Group also wants to convince shareholders of the reward for CEO David Schwimmer later this month.

Under the plans, he will have the opportunity to earn twice his current maximum package of £6.25m.

Mitul Shah, a partner at Deloitte who advises companies on their pay policies, said the trend towards “more radical pay proposals” was due to increasing competition for talent.

He said: ‘Many of these companies have a significant US footprint and cite the disparity in pay levels between Britain and the US as a challenge in competing for and retaining senior talent in a global market.’

Mark Austin, lawyer at global law firm Latham & Watkins, said: ‘If major international London-listed companies want to compete globally for talent, they need to be able to offer competitive compensation.’

Leading business figures in the city, including Julia Hoggett, chief executive of the LSE Group’s stock market operations, are pushing for executives to receive higher salaries. But some have raised concerns about the growing push for executive pay.

Luke Hildyard, from the High Pay Centre, said: ‘This is clearly good news for CEOs and other high-earning professionals. It remains to be seen what benefits it will bring to the rest of the country.”