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The Independent: Company chiefs' pay rises by 20%


By Katherine Griffiths Banking Correspondent

08 June 2004


The average value of the pay and pension deal of the heads of Britain's 100 largest companies rose last year by 20 per cent to 2.1m, in a year when the average wage increased by just 4.3 per cent.


The Independent's annual study of executive pay shows that in many cases senior members of UK boardrooms have seen their pay rocket while shareholders have seen returns dwindle. The findings underline the growing concern about the level of executive pay.


In the past 18 months there have been a string of clashes between shareholders and companies on the subject. The Government has warned that it might legislate to stamp out the worst examples of excess.


The chief executive to emerge as the worst-value boss this year is Rolf Stahel, the ousted head of the drugs group Shire Pharmaceuticals. Shire's latest financial information shows that the Swiss scientist received a pay-off that included a one-off 4.3m pension contribution, despite the fact that in the past three years investors have seen the value of their stakes fall by more than 50 per cent.


Coming in at second place is Michael Bailey, chief executive of Compass, the catering group behind Harry Ramsden's fish and chip shops. Mr Bailey received a 4.2m package in 2003, while Compass's shareholders' returns are down by nearly a third since 2001.


Several executives make a return to the top 10 offenders of those whose pay is far higher than average while their returns to shareholders are all far into negative territory. Sir Christopher Gent, who retired last year as chief executive of Vodafone ranks number three, down one place from last year. Lord Browne, chief executive of the oil giant BP, also makes another appearance. He is joined by Sir Philip Watts, the ousted chairman of Shell.


Company bosses who have been good value for investors have also been consistent. Sir Ken Morrison, chairman of WM Morrison, last year received just one quarter of the average pay, despite spotting a transformational opportunity when he pounced on Safeway.

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