FTSE 100 directors’ total earnings up by 14%

Directors of FTSE 100 companies have seen their total earnings rise by 14% over the past 12 months, according to research by Income Data Services (IDS).

The IDS Executive compensation review, which analysed the pay of FTSE 100 company directors, found that the increase was driven by a 58% rise in long-term incentive plans (L-tips).

In monetary terms, L-tips took the average median total from £764,000 in 2011/12 to almost £1.3 million in 2012/13.

Basic pay rises for FTSE 100 directors were relatively restrained at 4%, while annual bonuses were 9% lower, decreasing from £606,900 in 2011/12 to £553,200 in 2012/13.

Steve Tatton, editor of the report, said: “These divergent pay trends highlight the complex make-up of boardroom remuneration, illustrating that while one part of a director’s pay package may go down, another part may go up.

“With nearly two-thirds of FTSE directors benefiting from a long-term incentive plan award in the latest year, the higher share-based payouts clearly made up for any ground lost in lower annual bonuses.”

Frances O’Grady, general secretary of the Trades Union Congress, added: “Britain’s top bosses are back to their old tricks as their pay is growing 20 times faster than the average worker.

“It’s one thing replacing bonuses with long-term incentive plans, but FTSE 100 companies are simply exploiting this change to make their fat cats even fatter.”