No growth in executive bonuses in 2013, PwC says

Wednesday 30 January 2013

City of London

Many of the leading UK companies will freeze or reduce annual bonuses this year, it has been claimed.

According to Big Four firm PricewaterhouseCoopers (PwC), fewer than ten per cent of FTSE100 are expecting material increases to bonuses in early 2013.

Business leaders believe their remuneration committees plan to exercise restraint at upcoming AGMs.

Nearly half (48 per cent) of survey respondents expect bonus pay-outs will be about the same as last year, 21 per cent think they will be at least ten per cent lower and 17 per cent predict they will fall by more than a quarter.

Pay will also be largely static for FTSE100 executives, PwC found.

More than a third of respondents (38 per cent) said they were planning to freeze salaries for executive directors in 2013.

Salary increases, where given, are expected to be in the three per cent to four per cent range.

Tom Gosling, head of PwC’s reward practice, said the calls from shareholders for pay and bonus restraint appear to have hit home.

"Following a number of years in which bonuses had crept up to around 80 per cent of maximum pay on average; we expect them to fall back towards target levels of around 60 per cent of pay this year," he stated.

"This will mark the second successive year of bonus reductions in the FTSE100."

Mr Gosling said it is clear that companies and remuneration committees are "conscious of demonstrating a responsible approach to executive pay this year".

Posted by Steve Williams