The battle to tackle excess boardroom pay may already be won

At a low moment in late March, I suggested that all large companies should consider temporary cuts in executive salaries ‘both as a gesture of immediate solidarity and as a move to avert a longer-term backlash against wealth, privilege and the pillars of capitalism’. Latest research from the Chartered Institute of Personnel and Development and the High Pay Centre reveals that 36 of the FTSE 100 list of top companies followed my advice, most commonly with a 20 per cent salary cut for the chief executive but no reduction to the long-term incentive schemes that make up half of total boardroom pay.

The High Pay Centre, which hates high pay, clearly doesn’t think that’s enough of a sacrifice. But what’s interesting is that the battle to quell blatant excess in executive rewards, a subject on which I’ve been holding forth in these pages since 1993, may already have been won.

A separate analysis by Deloitte says median pay for chief executives of the top 30 UK-listed companies fell by more than 7 per cent last year, to £5.9 million, and that only eight FTSE 100 companies (including British American Tobacco, Morrisons and Tesco) encountered an investor revolt against their remuneration proposals, compared with 23 the previous year. Deloitte also found greater restraint in annual bonus payouts and a shift towards aligning executives’ pension contributions with those of their workforce.

In the CIPD survey, the average of FTSE 100 chief rewards last year was distorted by a one-off £59 million payout to Tim Steiner of Ocado. But the median figure, £3.6 million, was actually at its lowest since 2011, having peaked just below £4 million in 2017. More of a flattening after an unjustified upsurge than a serious downtrend, you might say, but still these numbers speak of new awareness among directors of what the outside world thinks of them.