FTSE bosses 'get big salary rise'

Average bonuses fell from £707,000 to £502,000 in the past year

The bosses of Britain's top firms have seen a sharp rise in salaries but bonuses have fallen, research suggests.

Average salaries rose by 7.4% over the past financial year for FTSE 100 chiefs - several times the rate of inflation, Incomes Data Services (IDS) found.

The pay analysts also said bosses' average bonuses were more than £500,000, although the payouts had fallen by 29% in the past year.

The net effect of this was a 1.5% drop in directors' overall remuneration.

The fall in bosses' average bonus payments was the largest slump in their growth for a decade, IDS said.

Average bonus payments fell from £707,000 in 2007/08 to £502,000 in 2008/09, it said.

But chief executives were still earning as much this year as they were when the economy was booming in 2006, it added.

Pay freezes?

Steve Tatton of IDS said: "In previous downturns growth in bonuses slowed, but for bonuses to shrink, and almost by a third, is highly unusual.

"It seems extraordinary in the current climate that salaries have gone up by 7.5%, but looked at historically this is not out of line - this is actually the latest level of high increases in terms of salary going back 10 years."

But he added that this may not last for much longer.

"A lot of advance notice being given by companies is that there are a lot more freezes on the way in 2009 so maybe they finally got the message that directors have to take the lead particularly in these tough times," Mr Tatton said.

"But we won't really know what the final outcome is until the end of next year."