Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

UK fat cats getting more cream?

Friday, May 06, 2016 - 01:43

Chief executives at Britain's largest companies had a pay cut last year. But profits fell further, ensuring a decade-long trend of bosses taking a rising share of corporate profits continued. Sarah Charlton reports.

▲ Hide Transcript

View Transcript

Twenty million dollars for BP boss Bob Dudley - even as the firm posts its biggest ever loss. Seventy million pounds for WPP chief executive Martin Sorrell - one of the biggest corporate payouts in UK history. Chief execs might have had a pay CUT last year, but falling profits actually mean a better payOFF. Reuters Tom Bergin has been crunching the numbers. SOUNDBITE (English) TOM BERGIN, REUTERS CORRESPONDENT, SAYING: "In 2005, chief execs received on average about one tenth of one percent of their company's profits as pay and benefits. In 2015 that percentage had gone up to about point six percent of their companies' profits, so really what we're seeing over that period is about a fivefold increase." Big firms deny there's a problem. They say erratic stock markets make it hard to connect the stock price with executive remuneration. One-off events and broader economic trends can also mask the link between pay and performance. BP, for example, says don't blame our boss for the big plunge in the oil price. But many question the system of committees and consultants who set executive pay: SOUNDBITE (English) TOM BERGIN, REUTERS CORRESPONDENT, SAYING: "Now the criticism of this is that consultants don't really have much of an incentive to keep a lid on investor pay, and that the people on the remuneration committees are often associates of the chief executives and other executives, or themselves from a corporate background, which means that they're pretty comfortable paying people a lot of money." 2014 was the first year that companies were obliged to put a single figure on the boss's pay. Now that they are, Britain's top bosses can probably expect a whole lot more scrutiny.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

UK fat cats getting more cream?

Friday, May 06, 2016 - 01:43