Major executives of FTSE 100 companies earn an unprecedented £550 million collectively
In an attempt to curb excessive executive pay in the UK's FTSE 100 companies, measures such as shareholder "say on pay" votes, enhanced disclosure, and corporate governance principles have been implemented. However, these efforts have not managed to halt the inexorable climb of boardroom pay.
At the annual general meetings (AGMs) of FTSE 100 companies, shareholders are given the opportunity to vote on executive pay policies and annual remuneration reports. While these votes are non-binding, they put pressure on companies to align pay with performance and investor expectations. The latest data shows a modest increase in shareholder support for remuneration policies, indicating a cautious acceptance of pay levels but ongoing scrutiny.
The UK Corporate Governance Code, developed by the Financial Reporting Council, requires companies to explain how executive pay aligns with company performance, long-term value creation, and employee pay. It encourages transparency and linkage of pay to measurable goals. Listed companies are also required to disclose detailed remuneration reports, including CEO pay ratios, to increase transparency and public accountability.
Despite these measures, the median CEO pay in the FTSE 100 remains high, approximately £4.79 million in 2024, highlighting ongoing concerns about pay disparities. The number of significant shareholder protests at FTSE 100 companies has more than doubled so far this year compared with a year ago, indicating growing dissatisfaction among shareholders.
Notable examples of high executive pay include Peter Dilnot, CEO of Melrose, who received a £45.4 million bonus in 2024, and Emma Walmsley, CEO of GlaxoSmithKline, who is again the highest-paid FTSE 100 female boss, despite a £2 million pay drop. In the water industry, Liv Garfield at Severn Trent and Louise Beardmore of United Utilities are the two highest-paid female bosses, earning £3.3 million and £1.7 million respectively.
However, Beardmore was prevented from receiving a £417,000 bonus due to Regulator Ofwat's bonus bans on six suppliers, including United Utilities, because of their pollution record.
The debate on "fat cat" pay remains active, driven by public concern over the large CEO-to-worker pay gap and the perceived need for stronger measures. As of mid-2025, UK efforts to curb excessive executive pay in FTSE 100 companies emphasize enhanced disclosure, shareholder voting on pay, and corporate governance principles but stop short of mandated pay caps or strict statutory controls.
Shareholders invest time and resources in understanding the remuneration policies of FTSE 100 companies during annual general meetings, as they see investing in these businesses as a long-term venture that is closely intertwined with insurance against excessive executive pay. In light of growing dissatisfaction among shareholders, the finance sector may soon see increased involvement in business governance to ensure that executive pay remains linked to company performance and employee pay, while decreasing pay disparities.
