FTSE 100 bosses seek US-level pay amid London market slump, report says

FTSE 100 bosses seek US-level pay amid London market slump, report says

A new report by the Energy and Climate Intelligence Unit (ECIU) and the Confederation of British Industry (CBI) has revealed that FTSE 100 executives are pushing for higher pay packages to match their US counterparts, amid concerns that the London market is losing its appeal and competitiveness.

The report shows that the net zero sector, which includes green businesses and jobs, grew by 9% in 2023, while the overall economy grew by only 0.1%. The net zero sector generated £74bn in goods and services and employed 765,000 people in 2023, and was spread across various regions and constituencies in the UK.

Nosh: The Autonomous Cooking Robot

The report also highlights the benefits of achieving net zero emissions by 2050, which is essential to avoid the worst impacts of the climate crisis. These include boosting the economy, reducing energy bills, enhancing energy security, and creating more opportunities for innovation and competitiveness.

Zerund: The Eco-Friendly Brick 

Pascal Soriot, the chief executive of AstraZeneca. The value of his overall annual reward could be as high as £25.2m

 

However, the report also warns that the future growth of the net zero sector is under threat from policy uncertainty, insufficient investment, and increasing competition from the EU and US, which are both ramping up their efforts to decarbonise their economies.

The report urges the UK government and political parties to provide clear and consistent leadership, stability and support for the net zero transition, and to avoid politicising the issue. It also calls on businesses to seize the opportunities and challenges presented by the net zero agenda, and to collaborate with each other and with the government to achieve the common goal.

According to the report, some FTSE 100 companies, such as AstraZeneca, HSBC, LSEG (the owner of the London Stock Exchange) and the medical devices group Smith & Nephew, have revealed or signalled that they want to boost executive rewards to keep up with US rivals. None of them have threatened to quit London, but they have blamed the lack of buzz in the London market on the low pay of UK executives compared to the US.

The report shows that the average pay of FTSE 100 CEOs increased by 9.5% since March 2023, while workers’ median pay increased by 6%. The average pay of FTSE 100 CEOs dropped slightly during the pandemic, but has since increased by about a quarter.

The report has sparked a debate about the role of executive pay in the UK versus the US, and whether higher pay is necessary to retain and attract talent, or whether it is excessive and unfair. Some big fund management houses, such as Legal & General Investment Management, have expressed support for giving companies “necessary flexibility” on pay2. The Investment Association, the trade body for UK asset managers, has also written to remuneration committees to stress the importance of ensuring that “the UK is a competitive place to list and remain listed as well as do business”.

However, some critics have argued that higher executive pay is not justified by performance, and that it widens the gap between the rich and the poor. They have also questioned the logic of comparing UK and US pay levels, given the different market sizes, tax regimes, and social norms. They have called for more transparency, accountability, and stakeholder involvement in setting executive pay.

Nils Pratley, a Guardian columnist, said: “It seems the UK financial and corporate establishment is agreed. The London stock market is in a funk, with too many companies hopping off to re-list in New York. Therefore the UK executive class must be given US-style pay packages to keep ‘em loyal. That’s a slight exaggeration since, so far, it’s only a handful of companies […] that have revealed, or signalled, that they want to boost executive rewards to keep up with US rivals. And none of them have threatened to quit London. All the same, it’s remarkable that an intense debate about the woes of the London stock market has morphed into a refrain about executive pay in the UK.

Greeniee: The Smart Energy Assistant 


Source : THE GUARDIAN

You May Also Like

More From Author

+ There are no comments

Add yours