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The 10 best value chief executives on the FTSE

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by Isabella Nimmo on Nov 13, 2012 at 13:43

As shareholders increase the pressure on executive pay, research from US firm Patterson Associates highlights the 10 chief executives who are delivering the largest returns on every pound they are paid.  

Peter Voser/Jeroen van der Veer: Royal Dutch Shell

Total CEO compensation: £12.9 million

Total added value: £36.2 billion

Value index (amount added in value for every £1 of compensation): £3,631

At the top of the pile is Swiss born Voser (above left), who was appointed CEO of Shell in July 2009, replacing van der Veer (right) who had been with the oil giant since 1971.

In January 2010 Voser oversaw a major reorganisation of the company, which he referred to as an attempt to ‘sharpen up’ and create a workforce that was ‘prepared to act differently’. This included global staff reductions and a stronger emphasis on performance improvement across all layers. While Voser admits he is satisfied with the changes so far, he believes it will be some time before Shell will get to where they want to be.

Stuart Gulliver/Michael Geoghegan: HSBC Holdings

Total CEO compensation: £9.8 million

Total added value: £27.7 billion

Value index: £2,828

Gulliver has been with HSBC for more than two decades and took over as chief executive in early 2011 when he replaced Geoghegan. Gulliver’s appearance at the top of the Patterson Index is some much needed good news considering his past sensitivity shown towards issues of executive pay and the recent rumblings over the bank’s money-laundering allegations.

Sir Andrew Witty: GlaxoSmithKline

Total CEO compensation: £12.9 million

Total added value: £36.2 billion

Value index: £2,815

Andrew Witty has headed the pharmaceutical giant since May of 2008 and along with a knighthood has gained a reputation for being good ‘value for money’. While Witty has focused mainly on investor concerns over GSK’s future growth, he has promised to remain committed to keeping prices low and to continue investing in local infrastructure.

Vittorio Colao: Vodafone

Total CEO compensation: £13.1 million

Total added value: £35.9 billion

Value index: £2,754

Vittorio Colao’s ‘top 10’ listing on the Patterson Index may assist in silencing some critics who took a dim view of the shareholder decision to offer him one of the highest compensation packages amongst the FTSE 100 CEOs back in 2011.

The mobile operator, under the Italian businessman’s leadership, has fared better than its rivals during the current period of negative growth in the European market and despite dipping around 2% during 2012. Much of this can be attributed to the generous £4.5 billion dividend received in January from Vodafone’s 45% stake in major US operator Verizon.

Ocatvio Alvidre/Jaime Lomelin: Fresnillo

Total CEO compensation: £4.2 million

Total added value: £8.02 billion

Value index: £1,928

Fresnillo, the world’s largest primary silver producer, announced the decision to appoint Alvidrez as their CEO earlier this year following his predecessor Jaime Lomelin’s (pictured) decision to retire at 77 in July. So far, Fresnillo has managed to hit its silver and gold production targets for 2012 with Alvidrez remaining ‘confident that it will continue to deliver growth’ and ‘meet its short and long term aspirations’.

Paul Polman/Patrick Cescau: Unilever

Total CEO compensation: £13.8 million

Total added value: £21.3 billion

Value index: £1,552

Polman took control of Unilever in October 2008 following the retirement of Patrick Cescau (above), who had been at the firm for 35 years. At the recent Rio+20 Conference in Rio de Janiero, Polman was keen to emphasize his commitment to sustainable business, insisting that large companies had the responsibility to ‘put the greater good ahead of self-interest.’ Unilever’s third quarter results appear at the very least to give credence to Polman’s business acumen with an increase in turnover by 10.3%.

Steve Holliday: National Grid

Total CEO compensation: £9.9 million

Total value added: £15.2 billion

Value index: £1,530

Steve Holliday became chief executive of National Grid in January 2007. The share price during Holliday’s tenure have so far remained stable, and with profit before tax up 5% for the year ending March 2012 such stability seems set to continue. Growth in the United States has also risen under Holliday with returns on equity up 8.8%. It remains to be seen whether the devastating effects of ‘Superstorm Sandy’ will impact upon operating profit for 2012/13 as National Grid take a hit on improvement works in New York.

Pascal Soriot/David Brennan: Astra Zeneca

Total CEO compensation: £16.4 million

Total value added: £21.8 billion

Value index: £1,329

Pascal Soriot was appointed CEO of the Anglo-Swedish pharmaceutical group at the start of October after shareholder pressure forced David Brennan (pictured) out after more than six years in the role. In his first day in the role Soriot suspended the firm’s frowned-up share buyback programme, which described as a ‘prudent step to maintain flexibility’ in his bid to appease discontent.

Henry EngelHardt: Admiral

Total CEO compensation: £1. 3 million

Total value added: £1.6 billion

Value index: £1,227

Henry Engelhardt is the chief executive as well as one of the founding directors of Admiral Group, one of the leading UK insurance providers. In 2011 Admiral saw share prices plummet following years of steady growth. This year however has seen a relative improvement with the insurance firm announcing they were on track to meet their expectations for 2012.

Peter Sands: Standard Chartered

Total CEO compensation: £11.6 million

Total value added: £14.2 billion

Value index: £1,222

Standard Chartered Bank has been led by Peter Sands since November 2006. The Bank’s reputation has been marred of late following the $340 million fine imposed upon it by the New York State financial department for its dealings with Iran. Nevertheless, the third quarter has revealed a strong performance and the firm remains on course to produce a decade of record profits.

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