FSTE Boss Earnings Up By 49%

Earnings by directors of the UK's top 100 companies increased by 49% last year, flouting the trend for the majority of workers throughout the nation.

According to the research by Incomes Data Services (IDS) published on Friday, executives in FTSE 100 companies received an average of £2.7 million in 2010 from payouts of salaries, bonuses and long-term incentive plans the last financial year.

IDS said the increase was even higher than the 43% rise in total earnings for CEOs, which suggests that executive "largesse" is evenly spread across the board.

The rise adds to the average bonus payment boost in 2010, which saw executive pay increase by 23%.

Steve Tatton, editor of the IDS report, comments: “At a time when employees are experiencing real wage cuts and risk losing their livelihoods, without further explanation it may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors.”

“The generous remuneration packages that FTSE 100 directors now receive indicates a marked improvement in boardroom fortunes. But with closer scrutiny of boardroom pay expected in the future, remuneration committees will have to make sure that they are able to provide full and thorough justifications for the bonuses awarded.”

The news comes only weeks after a worldwide charity revealed that 98% of the FTSE companies were avoiding tax by using international havens.

In a report by Action Aid on October 11, it was revealed that the banking sector makes heaviest use of tax havens, with a total of 1,649 tax haven companies between the ‘big four’ banks. The report said these banks were by far the biggest users of the Cayman Islands, where Barclays alone has 174 companies.

Chris Jordan, ActionAid’s tax justice expert said: “When multinationals use tax havens to avoid paying their fair share, ordinary people in both poor and rich countries are left to pick up the bill. Spending on doctors, nurses and other essential services gets cut for those who need it most."

The report found that a quarter of the 34,216 companies set up by FTSE 100 multinationals were located in tax havens. There were over 600 FTSE 100 subsidiary companies in Jersey, 400 in the Cayman Islands and 300 in Luxembourg – all of which are known tax havens.

(DW)