ESG factors slow FTSE 100 pay says PwC

Executive pay at FTSE 100 companies continues to show restraint in 2021, new research from PwC shows.

PwC say they have analysed executive remuneration at FTSE 100 companies which show that 2021 decisions demonstrated restraint by remuneration committees with:

• A 9% reduction in median total single total figure of remuneration for FTSE 100 CEOs, with a median of £2,940,000 in 2021 compared to £3,247,000 in 2020.

• 28% of CEOs received no bonus (as a result of not meeting targets, or the bonus being cancelled or waived) in 2021 compared to 14% of CEOs in 2020.

• 45% of CEOs have had their salaries frozen for 2021 compared to 52% in 2020.

The research also shows that almost 60% of FTSE 100 companies now include ESG measures as part of their executive incentive plans, with 58% of the FTSE 100 now linking ESG measures to executive pay, an increase of nearly one third on last year, when 45% of companies had these measures.

Just under half of companies (46%) had an ESG measure in their annual bonus for 2020, while almost one third (32%) incorporated an ESG measure into the assessment of their 2021 long-term incentive plans (LTIP). The average weighting of ESG measures is 16% in the bonus and 20% in the LTIP.

This year’s AGM season has seen a reduction in companies achieving very high shareholder support (more than 90% votes for) and an increase in companies receiving low support from shareholders (less than 80%) in respect to the voting outcomes on remuneration packages they’ve presented.