Bonuses still increasing for City bosses, despite investor anger

The bonuses paid to the directors of Britain's biggest companies are still increasing, despite the mounting frustration of their shareholders, new analysis shows.

The new figures, from Deloitte, reveal bonuses increased between 2014 and 2015, in line with an increase in the average salary, three years after the so-called 'Shareholder Spring'.

The median salary for FTSE 100 directors rose by two per cent last year, says Deloitte, in line with the previous three years. The median bonus remained 150 per cent of salary, an increase in real terms.

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The amount earned by City bosses based on their performance also increased in 2015. Deloitte found that in 2014 the median earnings were 73 per cent of the possible maximum for good performance. Last year, this rose to 77 per cent.

Seven FTSE 100 firms paid the maximum amount possible to their directors, says Deloitte, while only four companies chose not to pay any director bonuses at all.

The analysis also shows that the number of investor revolts against bonuses has doubled since 2012's Shareholder Spring, says the Daily Telegraph.

In 2012, protest votes by investors against unmerited executive pay packages increased dramatically. In April this year, The Guardian hailed Shareholder Spring II, saying the protest season was "off to a blistering start".

Now Deloitte says 2016 could be a "pivotal moment for executive pay", noting that eight top firms received less than 75 per cent support from investors for their "remuneration reports" and two did not win a majority.

Of the 30 biggest companies in the UK, just 26 per cent achieved 95 per cent support for their executive pay plans from shareholders – and that is just half the number who did so last year.

One notable rebellion was at BP, where 60 per cent of shareholders voted in April against a £14m pay package for chief executive Bob Dudley. BP had reported record losses and cut thousands of jobs.

Other major rebellions took place at Smith & Nephew, CRH, WPP and Anglo American. Deloitte says shareholders were concerned about "a lack of transparency about the link between executive pay and the performance of the business".

A rebellion at Smith & Nephew was triggered when the company decided to pay £2.1m to senior executives who had missed their performance targets, notes the Telegraph.

Deloitte's Stephen Cahill said the rebellions were significant, if limited: "While we're still talking about a relatively small number of companies, this is rightly a cause for concern.

"The 2016 AGM season has been bruising for a number of companies, perhaps even more so than the Shareholder Spring of 2012."