Pay for Britain’s top bosses rises 23 percent

The survey showed the average income for chief executives of companies in the FTSE 100 share index was £5.7 million ($7.25 million) in their financial year ending in 2017. (AFP)
Updated 15 August 2018
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Pay for Britain’s top bosses rises 23 percent

  • Excessive corporate pay has attracted public anger since the financial crisis
  • The increase far exceeds the 2.5 percent increase in average salaries for British workers to £29,009

LONDON: Pay packages for the bosses of Britain’s 100 biggest listed firms rose 23 percent over the past year, fueled by payouts for the CEOs of house builder Persimmon and industrial firm Melrose Industries, a survey showed on Wednesday.
Excessive corporate pay has attracted public anger since the financial crisis and Prime Minister Theresa May has denounced the gap between the amounts paid to bosses and average workers as irrational and unhealthy.
The survey by the Chartered Institute of Personnel and Development (CIPD) and the High Pay Center thinktank showed the average income for chief executives of companies in the FTSE 100 share index was £5.7 million ($7.25 million) in their financial year ending in 2017, up 23 percent from the previous year.
The increase far exceeds the 2.5 percent increase in average (mean) salaries for British workers to £29,009, according to the Office for National Statistics.
A similar study a year ago showed bosses’ average pay had dropped by 17 percent over the previous year.
CIPD said the strong performance of the stock market in the years to 2017 was probably a factor in this year’s increase but that this should prompt questions about the contribution of individual bosses to share performance as opposed to other factors such as economic context or the wider workforce.
The CIPD report said the mean figure was skewed by very large payouts to the bosses of house builder Persimmon and Melrose Industries.
Excluding these two chief executives would bring the mean single figure down from £5.7 million to £4.8 million, still representing a 6 percent increase from the previous year.
The highest paid CEO in the financial year ending 2017 was Persimmon’s Jeff Fairburn, who received £47.1 million, more than 20 times his pay in 2016, largely due to a long-term incentive plan dating back to 2012.
That plan gave share options to managers of Britain’s second-biggest house builder which they could sell once the company had returned a set level of cash and dividends to investors.
In February 2018 it scaled back these rewards amid criticism that a government scheme had bolstered house builders.
Simon Peckham, chief executive of Melrose Industries, an industrial turnaround specialist that clinched an £8 billion hostile takeover of British engineer GKN in March, was paid £42.8 million in the financial year ending in 2017, mainly due to a 2012 incentive plan.
A Melrose spokesman highlighted the impact of the long-term incentive plan, adding: “The salary and bonus of the CEO was £974,000 last year which puts him squarely in line with the average pay ratio for employees as evidenced in the report.”
A spokeswoman for Persimmon was not immediately available to comment.


Uber agrees to pay VAT in Egypt

Updated 51 min 36 sec ago
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Uber agrees to pay VAT in Egypt

  • Egypt introduced a law last May regulating ride-hailing apps Uber and Careem
  • Uber has said that Egypt is its largest market in the Middle East
CAIRO: Uber has agreed to pay value-added tax on its services in Egypt, Egyptian officials said on Monday, a move that may help resolve a long-simmering feud with traditional taxi drivers.
The agreement would also apply to other ride-hailing companies, the head of the Egyptian Tax Authority, Abdel Azeem Hussein, said. Egypt’s value-added tax (VAT) rate is 14 percent.
“Reaching an agreement and determining the tax treatment that will be applied to the company Uber and other companies operating in the same area will enhance confidence and cooperation between the authority and the tax community,” state news agency MENA quoted Hussein as saying.
Uber Egypt was not immediately available for comment.
Egypt introduced a law last May regulating ride-hailing apps Uber and Careem, after Egyptian taxi drivers filed a lawsuit arguing that the two companies were illegally using private cars as taxis and were registered as a call center and an Internet company, respectively.
An Egyptian court suspended Uber and Careem’s services in March last year after the taxi drivers’ suit but another court stayed the suspension ruling in April, allowing the companies to operate while the case was appealed to a higher court. A verdict is expected on Saturday.
Careem could not immediately be reached for comment on whether it will pay the VAT.
Uber riders and drivers in Egypt have said they faced various technical difficulties with the Uber app in recent weeks, which two security sources said was linked to data-sharing disputes with Egyptian authorities.
Uber has faced regulatory and legal setbacks around the world amid opposition from traditional taxi services. It has been forced to quit several countries, including Denmark and Hungary.
Uber has said that Egypt is its largest market in the Middle East, with 157,000 drivers in 2017 and 4 million users since its launch there in 2014.