Bosses' pensions 'run into billions'

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Bosses' pensions 'run into billions'

By Philip Aldrick

Daily Telegraph, May 13, 2003

London - The total pension pot for all FTSE 100 executive directors could be worth as much as £2 billion, the author of new research claimed yesterday.

Peter Boreham, head of executive remuneration at consultants Hay Group, yesterday told BBC Radio 4's Today programme: "If you total up all the executive directors in the FTSE 100, it would reach maybe £1 billion or £2 billion - something of that order."

Research compiled by the BBC and Hay Group showed that 36 senior executives had pension funds worth a total of £177m. The figure was calculated from information in companies' reports and accounts that has been made public this year following a change in the law.

Details of executive pensions have angered unions as companies have run up huge pension fund deficits and changed employee schemes. The combined pension fund deficit for FTSE 100 companies is estimated to be £60 billion, prompting several to switch staff from final-salary schemes to less secure ones.

Paul Myners, the former chairman of fund manager Gartmore and author of a Treasury report on pensions, told the programme: "I think we are now reaching a situation where looking colleagues in the eye when you bump into them in the lift is becoming increasingly difficult for leaders of some of our major companies."

His comments were echoed by Liberal Democrat trade and industry spokesman Vincent Cable, who said the survey "reinforced the growing anger and frustration surrounding executive pay and benefits". FTSE 100 non-executive directors also saw an improvement last year, according to a separate report from pay analyst Incomes Data Services. Their average pay has risen to £37,400 from £35,000.

Non-executive chairmen earned an average of almost £200,000 a year, IDS claimed. Sir Richard Giordano, chairman of the gas giant BG Group, was the highest paid non-executive, collecting £490,373.