The Square Mile is still the place to be a top executive: Average salary for FTSE 100 CEOs in London hits £4.28 million
London’s pole position as the largest financial center in the world remains unchallenged, and since the election of the Conservative party earlier this year and the subsequent unveiling of Chancellor of the Exchequer George Osborne’s extremely business-friendly budget, London’s large financial institutions have been further bolstering their fiscal prowess. Not only do London’s top publicly […]
London’s pole position as the largest financial center in the world remains unchallenged, and since the election of the Conservative party earlier this year and the subsequent unveiling of Chancellor of the Exchequer George Osborne’s extremely business-friendly budget, London’s large financial institutions have been further bolstering their fiscal prowess.
Not only do London’s top publicly listed companies have the backing of sensible financial policy and access to one of the highest talent pools in the world from which they can elect their senior executives, but the leaders themselves are also filling their coffers with ever increasing remuneration packages.
In a study last week by PriceWaterhouseCoopers, Chief Executives of FTSE 100 listed companies now receive an average combined annual remuneration package of £4.28 million.
This, according to PriceWaterhouseCoopers, consists of an average bonus of £1.12 million and an average salary of £891,000 for senior executives, an increase of 3% over last year, and a further 6.8% increase in the vast bonuses gained by FTSE 100 executives which took their total remuneration up to £4.28 million.
The increases in annual salaries and bonuses for top city bosses is outstripping increases in salaries in the wider economy, highlighting a long-held consensus by FinanceFeeds CEO Andrew Saks-McLeod that Britain’s economy is solely reliant on London’s City – known colloquially as The Square Mile – and that the remaining cities and towns across the entire country, including the London suburbs bear little or no resemblance economically, industrially or demographically to London’s financial center.
For example, The Square Mile is home to all six major banks, which between them handle over 45% of all interbank FX order flow globally. Additionally, the City of London plays host to large institutional interdealer brokers and liquidity providers including ICAP, Sucden, LMAX and CitiFX Pro.
Outside of the City, even within other parts of London, the vast majority of the public have never heard of such companies, and every day life is far from the ultra-wealthy, leading edge, highly technologically advanced corporate epicenter nestling in the heart of London’s business district.
The level of bonuses this year so far, which are designed to be linked to performance, was 72% of the maximum award available, a figure unchanged unchanged since 2012.
PriceWaterhouseCoopers report stated that most firms are introducing tighter controls on executive pay in response to shareholder concerns, however with the British economy growing at such a rapid rate – an astonishing 14% in London in the first six months of 2015, shareholders of most large British companies are unlikely to show too much disdain toward an increase in bonuses for the key people.
In contrast to last year, the economy is rapidly expanding in Britain, at a greater rate than the vast majority of Western nations, many of which, especially in mainland Europe, are teetering on the brink of financial oblivion by comparison.
In the summer of last year, FX traders at Barclays clung onto their jobs with a vice-like grip, preferring to pocket the higher remuneration packages available at Barclays compared to HSBC and RBS, despite Barclays’ severely impeded performance during 2014 and the omnipresent worry of the axe swinging over the electronic trading desks.
PriceWaterhouseCoopers’ report concluded that more than half of FTSE 100 firms now stipulate that there must be five years between the granting and release of long-term incentive payments.
Clawback has been introduced by almost all companies so that bonuses can be reclaimed in the event of wrongdoing, however, the report added that these new rulings on pay can be seen as arbitrary and overly complicated.
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