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FTSE 250 analysis reveals director bonuses

FTSE 250 analysis reveals director bonuses

Executive pay has recently come under scrutiny from different angles, including shareholders, investors and regulators. This has led to some significant changes taking place amongst FTSE 250 companies.

The alignment between investor goals and the short-term interests of senior executives has been the focus of Deloitte's latest analysis of the FTSE 250.

Share holdings

One of the key findings from the Big 4 firm's report is that companies have responded to investor calls to avoid short-termism by making executive directors hold onto shares for at least five years.

Nearly a third of companies (32%) have now brought in measures to regulate long-term share awards, which are typically earned over a performance period of three years.

Deferment of any bonus earned is now a policy for 60% of companies, and 85% have now introduced clawback and malus provisions to their incentive pay packages.

Remuneration partner at Deloitte, Mitul Shah, commented: "Investor pressure and regulation have led to some significant changes in executive pay. Companies have sought to respond to shareholder concerns with measures providing a stronger alignment of directors' interests with the long-term performance of the company.

"This along with improved engagement and dialogue between companies and their shareholders has resulted in the increased level of support."

Buy-out arrangements

Concern has also focused on buy-out arrangements and the overall size of packages being offered to senior staff.

The report found that FTSE 250 companies have been demonstrating some restraint, as shown by a 2.3% median salary increase for all executive directors in 2015. However, median bonus levels were at 120% of salary, and were actually higher than the previous year.


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