The number of FTSE100 companies in which shareholders disapprove of CEO pay fell in the last year by about half to 7%, according to Deloitte's annual U.K. CEO remuneration report published Monday.
Deloitte's report found that U.K. top executives' total pay packages declined but salaries remained the same, compared to the previous year. The median total remuneration for a FTSE 100 CEOs was about £3.4 million in 2018, down 15% from the previous year. Almost a third of FTSE 100 top executives also received median salary increases of about 2% in 2018, with bonus payouts similar to the previous year.
FTSE 100 companies are also moving to reduce executive pensions and implement requirements for executives to hold shares when they have left the company under the new U.K. Corporate Governance Code, according to Stephen Cahill, vice chairman at Deloitte.
"In the coming year we expect to see a further shift in reduced pensions and requirements for executives to hold shares post-leaving (the company)," Mr. Cahill said in the news release.
The number of companies offering incentive plans to CEOs has also been declining. Some 85% of FTSE 100 share programs stipulate that executives will receive no shares until at least five years since leaving the company. That compares with 45% of programs five years ago.
In contrast, the FTSE 250 companies' annual general meeting season was more challenging. About 16% of companies' shareholders criticized annual remuneration of CEOs.
"It has been a quieter AGM season for the largest companies with fewer shareholder revolts. However investors have shown that they will continue to bite when companies fall foul of their expectations on pay," Mr. Cahill said in the release.
"We are seeing continued evidence that investors expect the same standard of disclosure and engagement on pay across the U.K. market, with declining levels of shareholder support in the FTSE 250," he said. "In particular, we are seeing pressure from investors for improved transparency around bonus plans, as well as an expectation that remuneration committees will apply judgment and discretion where pay-outs are not considered to reflect the shareholder experience."
