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September 13, 2010    

Report reveals top execs in bonus cut

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by Kay Murchie
Report reveals top execs in bonus cut

A report by accountancy firm Deloitte has revealed a slight fall in executive bonuses - at a time when some major companies have been facing backlash from their investors over the size of their remuneration packages.

According to Deloitte, the average bonus for FTSE 250 executive directors is now 60% of salary - 10% lower than in 2009.

The report said over half of the UK’s biggest companies will not increase the pay of executive directors in 2010 - representing the second year in which many have had seen their salaries frozen.

The survey of 350 companies indicates that any pay rises this year are likely to be, on average, 3% - however, this is lower than in previous years.

However, bonuses are rising, the report finds.

Stephen Cahill of Deloitte comments: “Last year we saw a very large number of companies freezing executive salaries, but at the time it was difficult to predict whether this was a one-off.

“Now it appears that the years of executive salaries increasing at rates far in excess of inflation and the increase in average earnings are, at least for the moment, well and truly over,” he added.

“Remuneration committees were setting targets in the expectation that conditions in 2009 would be extremely difficult,” said Mr Cahill.

Meanwhile, the report also established that bonuses were being paid out over a “longer term” and were subject to a “claw-back” provision.

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