By Rob Starr, Content Manager, Big4.com
A PwC survey of large UK companies shows many FTSE100 executives will see no increase to their annual bonuses this year and some bonuses could even be cut by up to quarter.
Tom Gosling, head of the PwC reward practice, said:
“The calls from shareholders for pay and bonus restraint appear to have hit home. Following a number of years in which bonuses had crept up to around 80% of maximum pay on average; we expect them to fall back towards target levels of around 60% of pay this year. This will mark the second successive year of bonus reductions in the FTSE100.”
Despite remuneration committees being keen to demonstrate restraint, the PwC survey suggests that there is unlikely to be a large drop in executive pay levels in the UK over the longer term.
“There is no doubt that the intense shareholder, public and political focus on executive pay over the last 18 months has caused a change of approach,”Gosling said. “But the level of impact is still only modest and anyone hoping for a large-scale reduction in executive pay and bonus payouts in the long-term is likely to be disappointed. We expect executive pay to plateau for a period, rather than fall dramatically. ”