Open yesterday’s or this morning’s papers, and you’ll find plenty of reports about the
snouts of FTSE100 chief execs being in the trough again, while the rest of us suffer. Their pay is up 49 per cent, we read. Most people’s first and only response to these accounts of the
Incomes Data Services’ (IDS) latest findings will be anger — and understandably so. But much of this anger and reportage is based on a mis-reading of the actual report.
The BBC’s influence is huge. Its original report compared the rise in base salaries (which wasn’t 49 per cent, but a much less impressive 3.2 per cent) with a median rise for private sector workers of 2.6 per cent, but nowhere in the IDS press release does it say whether the rise in remuneration or salary among the FTSE100 directors is a median or a mean. That is pretty important. With a sample of directors at just a hundred mainly-globalised firms — hardly a proxy for employers in general — it is very possible for a small number of very large pay rises to bias the overall result.
For example, the BBC also reports that the highest paid chief executive was Mick Davis at Xstrata, who enjoyed a substantial £18.4
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