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Executive Pay Keeps Rising, Guardian Survey Finds

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http://www.guardian.co.uk/business/2009/se...ay-keeps-rising

Executives at Britain's top companies saw their basic salaries leap 10% last year, despite the onset of the worst global recession in decades, in which their companies lost almost a third of their value amid a record decline in the FTSE.

The Guardian's annual survey of boardroom pay reveals that the full- and part-time directors of the FTSE 100, the premier league of British business, shared between them more than £1bn.

Bonus payouts were lower, but the basic salary hikes were more than three times the 3.1% average pay rise for ordinary workers in the private sector. The big rise in directors' basic pay – more than double the rate of inflation last year – came as many of their companies were imposing pay freezes on staff and starting huge redundancy programmes to slash costs.

The Guardian data also shows that a coterie of elite bosses at the helm of multinational corporations are seeing their overall pay packets soar ever higher. The 10 most highly paid executives earned a combined £170m last year – up from £140m in 2007. Five years ago, the top 10 banked some £70m.

The Liberal Democrat Treasury spokesman, Vince Cable, said: "The Guardian's analysis shows the breathtaking cynicism involved in a lot of executive pay deals, which are unrelated to either personal or corporate performance and involve people who are very well off helping themselves to larger salaries when private sector wages in many companies are being cut."

The stealth increases in basic pay took much of the sting out of falls in bonuses tied to the performances of their companies. Overall pay for directors of FTSE companies, including bonuses, fell by an average of 5%.

The average chief executive of a blue-chip company now earns a basic salary of £791,000. However, adding bonus payments, share awards and the value of perks ranging from cars and drivers to school fees and dental work, the average pay package rises dramatically. Nearly a quarter of FTSE chief executives received total 2008 pay packages in excess of £5m, and 22 directors now have basic salaries of more than £1m.

Of course we need to reward these hard working people it's there skills at running big business that will get us out of this mess, clearly they need higher pay rewards year on year over inflation, whilst the workers get below inflation pay rises.

The bosses do all the work.

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Just did a small calculation

Started with workers on a 10th of what bosses earn and increased workers by 2% p.a and bosses by 10%.

After 20 years bosses earn 45 times workers: annoying but sustainable and of course has already happened

After 50 years it is 436 times. More than annoying, not really sustainable and we have almost got to this point too.

After 100 years it is 19000 times. But long before that presumably comes the revolution.

Whatever. They seem determined to go down this route. i'm out.

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Just did a small calculation

Started with workers on a 10th of what bosses earn and increased workers by 2% p.a and bosses by 10%.

After 20 years bosses earn 45 times workers: annoying but sustainable and of course has already happened

After 50 years it is 436 times. More than annoying, not really sustainable and we have almost got to this point too.

After 100 years it is 19000 times. But long before that presumably comes the revolution.

Whatever. They seem determined to go down this route. i'm out.

Interesting figures, just goes to show how much the workers are being screwed by those at the top.

I wonder at what point this system breaks down?

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This has fuelled HPI from the top down with cheap credit fuelling it from bottom up.

It's nothing new. The Guardian had a similar story in 2007:

Boardroom pay at the UK's top companies soared 37% last year as full-time directors were rewarded with inflation-busting increases in basic salaries, big cash bonuses and substantial payouts from share schemes.

The surge in pay, which takes the average total pay for a chief executive to £2,875,000, is more than 11 times the increase in average earnings and nearly 20 times the rate of inflation as measured by the consumer price index. The ratio between bosses' rewards and employees' pay has risen to 98:1, up from 93:1 a year ago - meaning that the work of a chief executive is valued almost 100 times more highly than that of their employees.

The figures are revealed in the Guardian's annual survey of executive pay at the 100 biggest companies on the stock market, conducted in association with the pay consultancy Reward Technology Forum. The pay rise for the 2006/07 financial year is the biggest in recent years. The previous year directors' pay climbed 28%, following rises of 16% and 13%.

For the first time last year the rewards handed over to the directors of FTSE 100 companies topped £1bn. The news comes after the Guardian revealed that bonuses for City workers rose 30% last year. And the huge rewards are being paid at a time when increasing numbers of homeowners are facing the threat of repossession and household debt is at record levels.

The TUC general secretary, Brendan Barber, said top directors were "losing touch with reality" and described the disparity in rewards as "morally offensive".

Topping the league of FTSE 100 directors' pay is Bob Diamond, who heads the investment banking arm of Barclays Bank and earned £23m last year. Mr Diamond, who is not chief executive of the bank, earns a basic salary of only £250,000, but his package was magnified nearly 100-fold as a result of a performance bonus of £10m and about £12m in share awards.

Three other top earners earned eight-figure salaries. They include Bart Becht, chief executive of Reckitt Benckiser, the company behind household brands such as Cillit Bang and Mr Sheen, and Giles Thorley, the boss of the Punch Taverns pubs group. Their pay last year was £22m and £11m respectively. Mr Thorley also emerges as the boss whose salary is most out of line with his employees; his remuneration package is equal to 1,147 of his employees, mostly pub workers.

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