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From FCA to FTSE firms: chief exec’s pay packets

As focus turns on chief executive pay packages, New Model Adviser® looks at how much chiefs are paid.

Pay package round-up

Not a week goes by without chief executive pay hitting the headlines.

Fund managers and shareholders are increasing their pressure on boards to cut the amount handed to bosses, with many voting against remuneration proposals at AGMs.

Both BP and Smith & Nephew were actually forced to rethink their pay proposals when shareholders voted against pay proposals this year.

Even Conservative prime ministers are putting pressure on big-paying boards. In her conference speech, Theresa May spokes of bosses who earn ‘a fortune’ and pledged to spread pay more equally.

With that in mind, New Model Adviser® went through annual reports to see how much bosses made last year.

Pay package round-up

Not a week goes by without chief executive pay hitting the headlines.

Fund managers and shareholders are increasing their pressure on boards to cut the amount handed to bosses, with many voting against remuneration proposals at AGMs.

Both BP and Smith & Nephew were actually forced to rethink their pay proposals when shareholders voted against pay proposals this year.

Even Conservative prime ministers are putting pressure on big-paying boards. In her conference speech, Theresa May spokes of bosses who earn ‘a fortune’ and pledged to spread pay more equally.

With that in mind, New Model Adviser® went through annual reports to see how much bosses made last year.

Nigel Wilson, Legal & General

Legal & General (L&G) chief executive Nigel Wilson has been at the forefront of the fight for fairer pay.

He chaired a committee on City pay practices, which earlier this year called for widespread reform. L&G Investment Management added to these calls this week when it wrote to firms saying they should meet employees every month to justify pay rises.

As such, it is probably fair to assume Wilson was left a little bit red-faced earlier this year when L&G initially reported the wrong figure for Wilson’s pay packet.

In its annual report published in March, L&G said he had received £4.7 million for 2015. However, an omission of the value of more than 291,000 shares, which were handed to Wilson as part of the company’s long term incentive plan, revealed that he had, in fact, earned £800,000 more than first thought.

Keith Skeoch, Standard Life

One chief executive who was willing to cut his pay due to shareholder pressure was Standard Life chief Keith Skeoch.

He took the generous step of agreeing his long term incentive bonus should be cut from 500% of his salary to just 400%.

However, this move was still not enough to convince all the company’s shareholder. At Standard Life’s AGM 22% voted against the remuneration proposals.

Skeoch’s total pay package was worth £3.6 million, consisting of a salary worth £574,000, a £1.5 million bonus, £1.4 million of long term incentives in the form of company shares.

Ian Gorham, Hargreaves Lansdown

Hargreaves Lansdown chief executive Ian Gorham received a £2.1 million pay package in the year ending 30 June 2016, as he sets to depart in the next 12 months.

Gorham’s cash bonus went up from £805,000 in 2015 go £1.1 million this year, while he was also handed a share-based bonus of £450,000. On top of this he also received a basic salary of £500,000 and £21,000 into his pension.

A note to the report showed Gorham is a prudent saver for the future, as he waived £15,000 of his salary in favour of making a higher pension contribution.

However, his total package paled in comparison to his 2014 earnings which reached £10.6 million, making him one of the highest paid chief executives in the FTSE 100.

Mark Wilson, Aviva

Aviva chief executive Mark Wilson began to see some of the benefits from the company’s financial turnaround since he took the reins in 2013.

Since Wilson joined, Aviva’s share price has risen by nearly 40%, boosted largely by the acquisition of Friends Life in 2015.

Wilson’s total package more than doubled in 2015 to £5.7 million as a result of receiving a long term incentive bonus for the first time. This share based payment was worth £2.5 million, adding to a basic salary of £980,000 and an annual bonus of £1.8 million.

David Bellamy, SJP

St James’s Place (SJP) chief executive David Bellamy’s earnings dropped to £3.1 million last year.

The SJP annual report showed that Bellamy earned £3.1 million in 2015 compared to £3.6 million in 2014. This was made up of a £492,000 basic salary, benefits of £59,168, a bonus of £688,800 and pension contributions of £98,400.

He also received £1.8 million worth of shares, down from £2.3 million due to a falling share price.

Phil Loney, Royal London

Phil Loney received an increased pay package of £3.1 million in 2015 as chief executive of Royal London.

This compared to a pay package of £2.9 million the previous year.

His package consisted of a basic salary worth £651,000, an annual bonus worth £984,000 and long term incentive pay outs worth £1.3 million.

Being the chief executive of a pension company, Loney also received £163,000 into his pension.

Martin Wheatley, FCA

How do regulators stack up compared to some of the companies they regulate?

Former Financial Conduct Authority (FCA) chief executive Martin Wheatley received a pay packet of £827,000 in his final year at the regulator.

This was 18% higher than his previous years’ salary but also included his salary during a stretch of ‘gardening leave’ which was not included last year.

This included a basic salary of £633,000, a bonus of £48,000 and pension contributions of £57,000 as well as other benefits amounting to £89,000.

Andrew Bailey, PRA

Meanwhile, Wheatley’s successor at the FCA received a pay package worth £350,000 in his final year as chief executive of the Prudential Regulation Authority (PRA).

Andrew Bailey collected a basic salary of £268,000 in 2015/16 and £80,000 in pension benefits.

This represented a slight increase on his previous year’s earnings at the PRA when he received £347,000.

Martin Sorell, WPP

Financial services often takes a bashing for handing out large pay packages.

Yet the highest paid chief in the UK works in advertising. Martin Sorrell, who is chief executive of WPP, received a pay package worth £70.4 million in 2015.

How did he take home so much?

His basic salary was actually ‘only’ £1.1 million, and his annual bonus was worth £4.2 million.

However, the long serving chief received nearly £63 million in share awards in 2015, pushing his total package past the £70 million mark. Sorrell has now received £190 million since 2009.

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