FTSE 100 chiefs claim they are hard-up compared with the States. But our ... trends now
A tale of a chief executive about to join a high-profile British company has gone down in City folklore.
Before taking the reins, a trusted advisor asks him the rather awkward question of how much he thought he should be paid.
'How much do you think I can get away with?' came the haughty reply.
It's an intriguing insight into the entitled, self-serving mindset that still prevails in some of Britain's boardrooms, despite decades of efforts by campaigners to curb 'fat cat' pay and a cost-of-living squeeze that has hit households.
The number of leading companies pushing for pay rises for their leaders has jumped even after they trousered an average of £4.5 million, a recent study revealed.
The analysis by business consultancy Deloitte found that 16 FTSE 100 companies are looking to revamp their pay policies – with nine of them having 'radical' plans to boost their boss's pay this year, compared to four previously.
'Many of these companies have a significant US footprint and cite the disparity in pay levels between the UK and US as a challenge when competing for and retaining senior talent in a global marketplace,' said Deloitte partner Mitul Shah.
But are British-based bosses really underpaid? And is there any evidence that more lucrative deals on offer across the Atlantic are causing an executive exodus of top talent?
To find out, The Mail on Sunday compared the pay of chief executives from leading firms on both sides of the pond.
We found that US bosses generally earn more than their British counterparts but the gap is not always that big, especially when stock market valuations are considered.
Charles Woodburn at BAE Systems took home £13.5 million last year – nearly £5 million less that the boss of Lockheed Martin. But the US defence contractor is worth more than twice as much as BAE based on their respective share prices.
The same is true in the oil and gas sector where Shell's Wael Sawan recently joined the growing chorus of bosses threatening to up sticks and leave London. He and BP's Murray Auchincloss would appear to be paid a pittance compared to their peers at Exxon and Chevron – until you realise that investors value shares in the US energy giants much more.
Pascal Soriot, chief executive of pharmaceuticals giant AstraZeneca, once complained that he was 'the lowest-paid chief executive in the whole industry'.
He has been playing catch-up ever since and is now Britain's highest paid boss, earning £16.9 million last year. Soriot still lags the likes of his US counterpart at Eli Lilly but a recent analysis by the Financial Times put him in the middle of the pack of 'Big Pharma' pay. That may explain why
