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Large companies listed in London are pressuring to capitalize a “change in tone” by investors by increasing the salary of their senior executives as part of a transatlantic remuneration war.
Some of the largest FTSSE companies have been encouraged by London Stock Exchange Group and the success of Smith & Nephew last year in securing the shareholders’ agreement to raise multimillion-pay salaries for their top executives, according to investors and room councilors of the board.
British American Tobacco and Compass Group – two of the 15 largest companies on the London Stock Exchange with market capitalization – are among those who propose to offer their leaders to improve payments this year.
“We will see more wage changes this year and next,” said Mitul Shah, head of the Deloitte unit advising on executive salary.
Separately, the UK Britain’s British Bilf Bonus has prompted large banks including barclays, HSBC and standard Chartered to ask shareholders to approve changes that will increase maximum pay for their leaders if fulfilled All objectives.
Lobbying for the highest salary was widespread among companies with large US divisions and those seeking to hire from America or hold executives who are able to transfer to transatlantic rivals, according to executive salary advisers.
“There is a growing recognition that global businesses in FTSE 100, with global peers, have to compete for the salary for talented leaders,” said Ambrose Faulks, co-manager of the Artemis Uk Select Fund.
Median FTSE 100 CEO Pay, excluding pension, stands at 4.2m, according to the High Salary Center Think-tank-113 times the average payment of full-time worker, but much less than approximately $ 16 million equivalent in the index US S&P 500.
Prominent city figures as London Chief of Stock Exchange, Dame Julia Hoggett have argued that UK leaders should be paid more if Britain holds talent, strengthen its competition and prevent public companies from moving their lists abroad.
There was a “change in tone” from investors who previously fled against US -style UK wage packages, Richard Belfield told Willis Towers Watson, a board adviser in their pay structures. “The debate on this issue (last year) opened the eyes of proxy agencies and investors who did not want to engage before.”
Higher salary push was concentrated on the 50 largest FTSE companies with an international focus on all groups listed in London, he added.
Investors and advisers said companies were also facing pressure to pay more to the next level of roles under the executive chief to withdraw and maintain talent.
Pay competition “is an issue that extends beyond CEO level and seems to be raising salary throughout the organizations,” said Sophie Johnson, Head of Governance and Voting at the Royal London Aseset Management.
While the payment of senior executives sitting on board must be unveiled in the annual reports, there has been less review of the next other managers’ reward, making it less controversial to increase their salaries and rewards.
James Harris, an Executive Compensation Advisor in Consultancy Alvarez & Marsal, said this was in turn leading to “paid compression” in the highest ranks of companies.
This was the motivation of boards to postpone salary increases for their leaders and key financial officials because managers reporting directly to these leaders “are colliding against them or on them,” Harris said, leaving many companies with “a problem of internal durability ”.
The Investment Association mitigated its stance on executive salary last year, giving the largest companies to adjust the reward for their circumstances. In return, investors are seeking discoveries on how companies compare their leaders’ salary to peers in other groups.
Among those who will benefit is Tadeu Maroco, the Bat chief executive, who was paid almost 6 million in total in 2024 and could receive up to £ 18.2m a year under a new payment agreement. The company said in its annual report that one -third of its old employment in the last three years had been from SH.BA and that it had “an elevated scale of vacancies at high management levels, in time elongated to be hired. ”
Compass Group Chief Executive, Dominic Blakemore, who was paid nearly 9.5m last year, could receive a maximum payment of £ 15.3m under the Catering 2025 reward policy. Its main financial officer and chief operating chief them are also compatible for larger payments.
