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Last Updated: Tuesday, 17 October 2006, 21:12 GMT 22:12 UK
Massive rise in top bosses' pay
WPP chief executive Sir Martin Sorrell
Sir Martin Sorrell earned more than 17m last year, the report found
The average pay of the UK's top company bosses rose 43% last year, research by Incomes Data Services (IDS) has shown.

The chief executives of the country's 100 largest listed companies earned an average of 2.9m in 2005-6, up sharply from 2m the previous year.

It means that the typical boss earns 86 times more than a typical employee.

The report found that Sir Martin Sorrell, head of advertising firm WPP, was the highest paid, earning 17.1m in total remuneration.

Leadership skills

Many top firms link executive pay directly to company performance.

In many instances, the amount of bonuses or share options paid out is related to a firm's profitability or how its share price has performed.

One leading businessman said the leadership skills needed at the very highest level of industry were in short supply and proven, successful bosses were paid what they are worth.

Top leaders should be well rewarded but fairly rewarded
Brendan Barber, TUC general secretary

"We are in a competitive market for talent," said Paul Myners, former chairman of Marks & Spencer.

"Shareholders want the best management and if they have to bid up for that management they will."

But unions remain fiercely critical of big pay rises for senior executives, arguing that many staff at leading firms are getting pay increases in line with or just above inflation.

"Top leaders should be well rewarded but fairly rewarded," said Brendan Barber, the TUC's general secretary.

'Cashing in?'

The IDS report found that the average basic salary of FTSE 100 bosses rose 9% to 730,796 last year.

Martin Sorrell(WPP):17.1m
Michael Davis(Xstrata):15.3m
Bart Becht(Reckitt Benckiser):13.6
Richard Segal(Partygaming):11.7m
Giles Thorley(Punch Taverns):10.6m
Source: IDS Executive Compensation Review - 2005/6

In addition, bosses received an average bonus of 771,173 and other financial benefits worth 51,167.

Taking into account non-cash contributions such as share options and long term incentive plans, average total earnings rose to 2.88m.

Besides Mr Sorrell, the report found the chief executives of mining firm Xstrata, drug giant Reckitt Benckiser and pub operator Punch Taverns and the former boss of Partygaming all earned more than 10m each.

A similar report by accountants Deloitte earlier this month found that the average pay of bosses running the UK's top 350 listed firms rose by 28% last year.

The top UK earners and how much they're paid

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