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KPMG's Guide to Directors' Remuneration 2017

KPMG's Guide to Directors' Remuneration 2017

A wide-ranging overview of executive and non-executive directors’ remuneration trends in FTSE 350 companies.

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I am pleased to share with you the 2017 edition of the Guide to Directors' Remuneration. This guide analyses the latest trends in FTSE 350 directors’ pay. It covers basic salary, incentives and pensions. We also look at the wider factors that impact executive pay and how these have changed over the year.

Key Findings

  • Basic salary: Similarly to last year, around 1 in 5 Executive Directors in the FTSE 350 received no salary increase.
  • Regulatory: There have not been major changes to remuneration rules affecting UK main market listed companies in 2017, but there has been a great amount of discussion and debate surrounding boardroom pay, e.g. the Government Green Paper. 
  • Annual bonus and deferred annual bonus: Less than 1 in 10 Executive Directors in the FTSE 350 received no annual bonus, a slightly lower fraction than last year. Around a third of Executive Directors in the FTSE 350 received annual bonuses of over 80% of the maximum opportunity. 
  • Pensions: There is increased shareholder focus on aligning the pension arrangements for Executive Directors with the wider workforce in the FTSE 350. The median maximum employer contribution for pension has reduced by 7% and 17% of basic salary for DC plans and pension cash supplement respectively in the FTSE 100. 
  • Long term incentives: Median awards were 245% and 166% of basic salary for Chief Executive of FTSE 100 and FTSE 250 companies respectively. TSR and EPS remain the most prevalent performance measures. Around a third of companies introduced or increased post-vesting holding periods across the FTSE 350. 
  • Shareholders: The average votes in favour of the policy report and the annual remuneration report were both above 90% despite increased focus from the Government and investor bodies.
  • Diversity: Across the executive director population, only 6.8% (up from 6.1% in 2016) are currently women while the vast majority (93.2%) are men. Of the positions occupied by women approximately two-fifths (43%) are Finance Directors. 

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