Senior executives in the UK's biggest companies have seen their average earnings go up by more than a quarter in the past year.
New research suggests the bosses of top firms made an average of £4m a year. The increase is due to a rise in value of long term incentive plans which have replaced cash bonuses. Executives have benefited as the stock market bounced back. It meant that the value of long term investment plans had risen to an average of £938,000 for directors, and to £1.6m for chief executives. Plans were often calculated based on a firm's performance in comparison with its competitors, rather than its own performance history. This meant that an executive might still be rewarded if the company's performance had deteriorated, as long as competitors had done worse.
New research suggests the bosses of top firms made an average of £4m a year. The increase is due to a rise in value of long term incentive plans which have replaced cash bonuses. Executives have benefited as the stock market bounced back. It meant that the value of long term investment plans had risen to an average of £938,000 for directors, and to £1.6m for chief executives. Plans were often calculated based on a firm's performance in comparison with its competitors, rather than its own performance history. This meant that an executive might still be rewarded if the company's performance had deteriorated, as long as competitors had done worse.
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