KPMG's Guide to Directors' Remuneration 2016

KPMG's Guide to Directors' Remuneration 2016

Our guide offers a wide-ranging overview of executive and non-executive directors’ remuneration trends in FTSE 350 companies.

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The guide provides a wide-ranging overview of directors’ remuneration in FTSE 350 companies, including salary, pension, bonus and long-term incentives for executive directors and non-executive directors’ fees. It also provides an overview of current issues affecting the remuneration landscape.

Key findings:

  • One in five executive directors in FTSE 350 companies received no salary increase, which is the lowest level of pay freezes in the last four years.
  • More than a third of FTSE 350 companies paid their executive directors bonuses of over 80% of the maximum opportunity.
  • Median gains under long term incentive plans are more than double for FTSE 100 executive directors when compared to those in the FTSE 250.
  • Average vote in favour of remuneration reports was 92% - hardly the 'shareholder spring II' headlined.

Despite companies' continued restraint in 2016, annual bonus and long term incentive payments remain at high levels. While there have been no regulatory changes in 2016, we have seen more interested parties entering the boardroom pay debate. The interesting point to note, is that while there are many voices agreeing something is wrong, the view as to what needs to be done differently is more fragmented. There is no clear solution or change being put forward which will “solve” the problem.

Any pay approaches considered within remuneration committees should be based on full information and evidence, explained in a transparent fashion which clearly demonstrates the business rationale. It is unlikely the media interest will die down, but both companies and their shareholders agree, that no further regulatory intervention is required.

© 2017 KPMG Channel Islands Limited, a Jersey company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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