Early insights from FTSE 100 Directors’ Remuneration Reports - 2024

Over recent months, one of the main areas of debate on executive remuneration has been how the approach in the U.K. contributes (or otherwise) to its competitiveness as a place for businesses to list and thrive. Our recently published article: Is the UK approach to executive pay broken? delves into how the approach to remuneration could evolve and its impact on the competitiveness of businesses in the country.

 
While remuneration is just one aspect of the broader discussion, it has played a significant role in shaping the decisions of some FTSE 100 remuneration committees. As we navigate this challenge alongside companies, we have observed a notable shift in approaches. In 2024 alone, 35% of the 17 companies proposing new policies for shareholder approval (10% of companies that have published to date) have adopted more "atypical" approaches. These can broadly be categorized as significant increases in variable pay opportunities and/or the introduction of alternative/portfolio of vehicles.

In addition to these atypical approaches, we've identified several key themes compared to last year. These include;

• A narrowing gap between all employee and executive director (ED) salary increases
• An increase in the proportion of companies increasing both bonus and LTI opportunities
• No change to median incentive opportunities
• No significant changes to incentive payouts
• An increase in the application of downwards discretion applied to formulaic bonus out-turns, and
• A continued rise in the number of companies increasing Chair and/or basic non-executive director (NED) fees on an annual basis.

To delve deeper into the above findings and gain a comprehensive review of remuneration outcomes for 2023 annual report and accounts thus far, download our report.