July 2018
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Are these Britain’s 20 most overpaid bosses?

A reader of this blog contacted me yesterday and suggested that I back up my claims about British bosses being overpaid by revealing some names and numbers. It’s quite difficult to find comparative figures. But there’s a company called Obermatt which produces a report looking at executive pay. In particular they compare financial performance with levels of executive remuneration (including bonuses and share options) and come up with what they call “deserved remuneration” and “excess remuneration”.

I’ve been through their figures and produced a list of the 20 UK FTSE100 companies giving their CEOs the most “excess pay” (see chart). The 1st column is the ranking by amount of excess pay: 2nd column their ranking by financial performance of the company: 3rd column the total amount received by the CEO for the 3 years 2008-2010 (inclusive): 4th column the pay level Obermatt judges appropriate: 5th column the amount of excess pay: (click on picture to see more clearly)

So you can see, for example, that the BG Group came third in amount of excess pay, while the company was only 43rd out of 100 in financial performance.

Care needs to be taken when looking at these rankings and figures. For example, if an executive had a long-term performance incentive plan which was paid during these three years (as I believe happened for Reckitt Benckiser), then this would skew the figures. Nevertheless, the table does suggest the names of a few companies where the CEO pay package may have been rather more generous than necessary.

So what can we use this for? Firstly, we can see that some of the amounts paid seem more than stunning. And secondly, tomorrow I’ll publish a list of the FTSE100’s most underpaid bosses. So we can question why some high-performing CEOs seem content with comparatively modest salary and bonus packages, while some poor-performing bosses are stuffing their pockets with tens of millions.

(source for the information – http://www.obermatt.com/rankings/uk/)

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