Salary increases for executive directors and senior executives remained at 2003 levels while bonus payments decreased last year, according to a survey by Mercer Human Resource Consulting. The study covered reward arrangements for 47 top management positions in 38 large UK companies, including FTSE 100 companies and other large multinationals.
"Executive reward packages are beginning to look very different compared to five years ago," said Richard Lamptey, European Partner at Mercer. "Increased disclosure, shareholder attention and the state of the stock market have changed the value of packages, the balance between fixed and variable elements and how pay is delivered."
Median salary increases remained at 6% of base pay, though practices varied considerably between and within companies.
"Media interest and growing scepticism among institutional investors have put executive pay under greater scrutiny," said Mr Lamptey. "There is now more pressure to keep executive pay level increases in line with rises for other employees."
Median annual bonuses in the companies surveyed were 39% of salary in 2004 compared to 49% in 2003. The survey also found bonus payments varied significantly between companies, reflecting their performance. For example, bonuses for Group Chief Executives ranged between 8% and 140% of salary while those for Finance Directors were between 7% and 132% of salary.