The median pay for a CEO of a FTSE 100 company rose 11% in 2017 from the previous year even amid investor and government criticisms of excessive executive compensation, according to a survey by High Pay Centre and the Chartered Institute of Personnel and Development.
The FTSE 100 CEO median pay climbed to £3.9 million per year from a revised £3.5 million in 2016 and £3.8 million in 2015.
The 2017 survey used the median instead of the mean figure to lower the impact of payouts for the two-highest paid CEOs — Jeff Fairburn of Persimmon PLC and Simon Peckham of Melrose Industries PLC — at £47.1 million and £42.8 million, respectively. Using the mean measure, CEO mean pay would show a 23% jump to £5.7 million per year in 2017 from the prior-year period, following a 17% annual drop in 2016.
Even excluding the two highest payouts, the mean CEO pay in 2017 would still be up 6% year over year, which shows a "continued underlying trend of rising executive pay," High Pay Centre and the Chartered Institute of Personnel and Development said.
"Despite increased investor activism and the planned introduction of pay ratio reporting, the evidence suggests that very little is changing when it comes to top pay in the U.K.," Chartered Institute of Personnel and Development CEO Peter Cheese was quoted by The Independent as saying.
While the median CEO pay increased by 11%, the median pay for full-time workers was up only 2% over the same period. The mean pay ratio between FTSE 100 CEOs and the pay package of their employees widened to 145 to 1 in 2017 from 128 to 1 in 2016, but just below the 146 to 1 ratio in 2015.
The survey also noted that while women make up 7% of FTSE 100 CEOs, they earn only 3.5% of the total pay.
To create "fairer and more ethical approaches" to pay and reward, the report recommended that remuneration committees and shareholders focus more on aligning CEO reward with pay practices throughout the organization, among other measures.