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Chief executive salaries at VscekSE 100 companies rose by £560,000 last year to an average of almost £5m, returning to levels not seen since 2017.
The findings come as UK executives push for higher salaries to compete with international rivals, particularly in the US, where corporate executives earn significantly higher salaries.
The increase in average pay was driven by “a small number of companies giving really big pay premiums rather than big increases across the board,” said Luke Hildyard, director of the think-tank High Pay Centre, which compiled the data.
The number of companies in the blue-chip index paying their executives more than £10m has risen from four in 2022 to nine in 2023.
According to the High Pay Centre’s analysis of corporate communications, average pay increased more modestly, from £4.1m to £4.19m, but it is still the highest since 2009, the first year for which data was collected.
AstraZeneca chief executive Sir Pascal Soriot remained the highest-paid VscekSE executive, with a total salary of £16.9m, up from £15.1m a year earlier.
Erik Engstrom and Charles Woodburn, executives at Relx and BAE Systems, each received more than £13m.
Rolls-Royce boss Tufan Erginbilgiç received similar pay, but this included a one-off £7.5m share award, which will not fully vest until 2028, to compensate him for the shares he gave up when he joined his previous private equity role.
Soriot’s pay could rise further this year, as AstraZeneca has in recent months joined major UK-listed groups such as London Stock Exchange Group and Smith & Nephew in winning shareholder support for higher executive pay packages.
LSEG chief David Schwimmer said in February: “If London has the ambition to become a world-leading financial centre and attract world-class companies, that means it needs to attract world-class talent.”
The analysis covers the entire compensation package of CEOs, including salary, bonuses, pensions and incentive plans.
Companies say most executive pay comes from bonuses and performance-related stock awards. Relx’s stock price has increased about sevenfold since Engstrom took over in 2009, for example.
But these figures will be exploited by opponents of high pay: according to the High Pay Centre, the average VscekSE 100 executive is now paid 120 times the average British full-time worker.
Hildyard attributed the gap to “declining union membership, low levels of worker participation in corporate decision-making, and a corporate culture that puts the interests of investors ahead of those of workers, customers, suppliers, and other stakeholders.”
“These developments have been very positive for those at the top, but it is more questionable whether they are in the interest of the country as a whole,” he added.
The UK’s new Labour government has pledged to make it easier for trade unions to gain statutory recognition and improve their rights to access workplaces to organise and recruit.
GSK chief executive Dame Emma Walmsley’s £12.7m pay made her the highest-paid woman.
The average salary of the six companies that had female CEOs for the full year was just under £2.7m, compared with almost £4.2m for men.
