Pay rises for non-executive directors (NEDs) in FTSE 100 companies are starting to plateau after several years of rises following the financial crisis, as companies try to keep pay increases for executives and non-executives more in line with the rest of their employees, according to a new report by PwC.
PwC's research indicates the median base fee level for FTSE 100 chairmen is £361,000 in 2013, which is broadly flat compared to 2012 (£360,000). For FTSE 100 NEDs the median base fee is £61,000 in 2013, a slight drop from 2012 where the median was £64,000.
This follows five years of increases for both FTSE 100 chairmen and non-executive directors from a base of £300,000 and £55,000, respectively, in 2009. Fees in FTSE 250 companies have continued to rise over the same period.
Fiona Camenzuli, partner in PwC's reward team, said: 'The huge increase in risk and regulatory requirements has put non-executive directors firmly in the spotlight and led to many dedicating far more time to the role to properly fulfil their duties. Many non-executive directors felt their pay needed to increase to reflect the time commitment and considerable reputational risk which now accompanies the role.'
As well as public pressure to keep the lid on top level pay, Camenzuli said the new reporting regime will also have an impact. This requires companies to establish and disclose their policy on fees, which will be subject to a binding vote.
The intense spotlight on executive pay means that one group who continue to see steep rises in their fees are members of the remuneration committee in recognition of the pressures they face. PwC calculates the fees for chairmanship and membership of the remuneration committee for FTSE 100 companies have jumped 65% and 140% respectively since 2009, taking the median fee for a remuneration committee member from £5,000 in 2009 to £12,000 in 2013.
The median fee for chairing the remuneration committee now stands at around £20,000 per annum in the FTSE 100, up from £12,000 in 2009. This is the same level as audit committee chairmanship fees, which PwC says remained at £20,000 per annum for a third consecutive year. Membership fees for the audit committee, which had not risen since 2010, have increased by 50%.
