Executives at Britain's top companies saw their basic salaries leap 10% last year, despite the onset of the worst global recession in decades, in which their companies lost almost a third of their value amid a record decline in the FTSE.
Bonus payouts were lower, but the basic salary hikes were more than three times the 3.1% average pay rise for ordinary workers in the private sector. The big rise in directors' basic pay – more than double the rate of inflation last year – came as many of their companies were imposing pay freezes on staff and starting huge redundancy programmes to slash costs.
The Guardian data also shows that a coterie of elite bosses at the helm of multinational corporations are seeing their overall pay packets soar ever higher. The 10 most highly paid executives earned a combined £170m last year – up from £140m in 2007. Five years ago, the top 10 banked some £70m.
The Liberal Democrat Treasury spokesman, Vince Cable, said: "The Guardian's analysis shows the breathtaking cynicism involved in a lot of executive pay deals, which are unrelated to either personal or corporate performance and involve people who are very well off helping themselves to larger salaries when private sector wages in many companies are being cut."
The stealth increases in basic pay took much of the sting out of falls in bonuses tied to the performances of their companies. Overall pay for directors of FTSE companies, including bonuses, fell by an average of 5%.
The average chief executive of a blue-chip company now earns a basic salary of £791,000. However, adding bonus payments, share awards and the value of perks ranging from cars and drivers to school fees and dental work, the average pay package rises dramatically. Nearly a quarter of FTSE chief executives received total 2008 pay packages in excess of £5m, and 22 directors now have basic salaries of more than £1m.
The survey is likely to spark renewed calls for shareholders to take a tougher line to control boardroom pay. Earlier this year, City minister Lord Myners accused shareholders of behaving like "absentee landlords".
In the wake of the banking crisis, there has been a wave of shareholder revolts over directors' remuneration. But even if investors vote against over-generous boardroom payouts, companies are not obliged to take their views into account.
Some of the City's biggest and most influential shareholders are also part of the problem – their bosses are among those raking in multimillion-pound salaries. Michael McLintock, a director of Prudential and the boss of its investment arm, which holds big stakes in thousands of companies, was last year paid £6.6m – putting him among the 25 best-paid bosses in the UK.
Brendan Barber, general secretary of the TUC, said: "The recession has done nothing to stop the gap between top directors and the rest of their staff getting wider every year.
"It is even more offensive when the Institute of Directors has called for spending cuts that would hit pensioners, the poor and low-paid public sector staff. We've already had the 1980s-style recession, it looks depressingly like we are going back to 1980s greed-is-good politics, too."
The highest paid boss last year was Bart Becht, the chief executive of Reckitt Benckiser, whose brands include Harpic, Veet and Strepsils. He was rewarded with £36.8m in pay, bonuses, perks and share incentive schemes. Becht, 53, has been a regular feature in the upper echelons of the annual survey for several years, earning more than £80m during the last three years.
The highest paid woman was Cynthia Carroll, the head of the mining giant Anglo American. The vast multinational also owns a big stake in the De Beers diamond business. Carroll, a 52-year-old American, earned a basic salary of more than £1m last year, but benefits, bonus payments and share awards took her total payout to nearly £4m. She was also paid another £93,000 sitting on the board of BP.
The glass ceiling, however, appears to be almost entirely intact. Just one in 15 boardroom seats are occupied by women – and most of those are non-executive, part-time directors. Only 22 women hold full-time executive director positions, involved in the day-to-day running of the business.
The best-paid boardroom last year was that of Tullow Oil, a London-based oil exploration business, where 11 directors picked up a total of £59m. Most of their gains came from share options, as they cashed in on a share price that had soared along with the oil price. The directors made much more from their cheap share handouts than the rest of the 470-strong workforce were paid in the year.
Despite the credit crunch, the best-paid employees are still those working for City-based firms. The average pay at money broker ICAP, which employs 4,330 staff, was more than £200,000. Hedge fund group Man had the second best-paid staff. Its 1,776 employees were paid a total of £353m in 2008 – an average £198,000 each. Five years ago the Guardian survey showed that the average salary at Man was £100,000. The chief executives of those two companies also feature among the highest-paid FTSE 100 chiefs. Man boss Stanley Fink, who has now stepped down, received £15m last year, while ICAP's Michael Spencer received nearly £7m.
At the other end of the spectrum, the worst-paid staff are those working in the retail and leisure sectors and for mining companies.
