A Culture of Excess
- There are 383 remuneration committee members in the FTSE 100 sample.
- Out of the 383 remuneration committee members, 246 (64 per cent) held at least one additional position at another company. The total number of positions held by the 383 remuneration committee members was 779.
- 33 were members of more than one FTSE 100 remuneration committee during 2014.
- One remuneration committee member, Johanna Waterous, sat on the remuneration committee of three FTSE 100 companies: Morrisons, Rexam and RSA Insurance Group.
- 67 FTSE 100 companies, or over two thirds, share one member of their remuneration committee with another FTSE 100 remuneration committee.
- 157 remuneration committee members held non-executive positions on other company boards.
- 53 remuneration committee members were Chair of another company’s board, while five were Vice-Chair of another company’s board.
- 22 served as the Senior Independent Director on another company’s board. 38 held executive roles on other companies’ boards.
- Over one third of FTSE 100 companies have executive directors from other companies sitting on their remuneration committees.
- Out of the 38 who held executive positions on other boards:
- - twenty-six served as Chief Executive Officers
- - one served as a combined CEO & Chair
- - nine served as Executive Directors
- - one served as an Executive Chair
- - one served as an Executive Vice Chair.
- 33 remuneration committee members held three or more additional positions on other company boards. Anthony Nightingale and Andrew Simon, remuneration committee members at Prudential and Travis Perkins respectively, both held eight additional board positions.
- The average (mean) total remuneration received by members of remuneration committees was £441,38312, over 16 times average full-time earnings of £27,200.
- Excluding those who hold executive board positions elsewhere, the average (mean) total remuneration was £192,781, over seven times average earnings.
In the UK, the Corporate Governance Code stipulates that remuneration committees should be comprised of independent non-executive directors of the company. Many non-executive directors are current or former members of other company boards; some will sit on multiple boards. Through examining company annual reports it is possible to compile information on pay received by remuneration committee members in a particular year from their different board roles.
This report uses information in 2014 annual reports to examine the payments received by the remuneration committee members of FTSE 100 companies. Information has been sought on total remuneration of FTSE 100 remuneration committee members, including pay from current executive and other nonexecutive directorships of FTSE listed companies. Directorships on boards of companies listed in other countries are included, but the data may not include information on all overseas positions held by FTSE100 directors due to lack of appropriate disclosure outside of UK. This means that our report is likely to be a conservative estimate of the total earnings of remuneration committee members.
The report finds that on average remuneration committee members were paid £441,3839 , which is more than 16 times average full-time earnings of £27,20010. The highest paid remuneration committee member was paid £9,228,248, or 339 times more than average earnings.
The report also reveals that of the 383 remuneration committee members included in the sample, 246 (64 per cent) held a board position at another company during the year under review. Thus nearly two thirds of the current membership of remuneration committees is drawn from the corporate world in which high and excessive pay are taken for granted. Their own levels of remuneration are far in excess of the pay of ordinary workers within the same companies or across the economy as a whole. It is important to remember that non-executive board positions are in no way fulltime positions; time commitments will vary, but a recent report found that NEDs on the largest companies spend an average (median) of 30 days per year on their role, with the median time spent on remuneration committee work being four
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