The landscape of executive compensation in UK companies in 2024 reflects a complex interplay of market dynamics, regulatory shifts, and heightened stakeholder expectations. Analysis indicates a continued upward trajectory in CEO remuneration, particularly within the UK's largest listed entities, the FTSE 100. The median total remuneration package for FTSE 100 Chief Executive Officers (CEOs) in 2024 is estimated at approximately £4.79 million, marking a 7% increase from £4.49 million in 2023. This robust growth at the top contrasts sharply with the median UK worker's salary, underscoring a persistent and significant pay disparity.
A pronounced strategic drive for higher executive pay is evident, primarily fueled by concerns regarding global talent retention and the perceived lack of competitiveness of UK remuneration packages when compared to leading international markets, notably the United States. Concurrently, the regulatory environment is evolving, shifting towards greater flexibility in remuneration policies while simultaneously strengthening transparency requirements. This evolution is shaped by revised corporate governance codes and updated investment association principles, aiming to strike a balance between corporate agility and accountability.
Executive pay continues to face intense scrutiny, characterized by increasing shareholder activism and growing public demand for pay equity. This has led to a heightened focus on CEO-to-worker pay ratios and a discernible movement towards integrating Environmental, Social, and Governance (ESG) metrics into executive compensation structures. The composition of executive pay packages remains heavily reliant on variable components, with long-term incentives (LTIPs) and bonuses constituting the largest proportion of total remuneration. This structure is designed to align executive performance with shareholder interests. A notable pay disparity persists across C-suite level positions, with CEO compensation in FTSE 100 companies vastly exceeding that of other executive roles and the general average for CEOs in the broader UK market.
This report provides a comprehensive and detailed analysis of CEO and broader C-suite compensation within UK companies for the year 2024. It delves into recent trends shaping executive remuneration, explores the underlying drivers influencing these pay decisions, and examines the evolving corporate governance landscape. While focusing primarily on data from FTSE 100 and FTSE 350 companies due to data availability and their market significance, the report integrates understandings from 2023 data for robust trend analysis and offers forward-looking perspectives for 2025 where available. The aim is to offer a clear, data-driven understanding of executive pay practices, their implications for corporate strategy, and their broader societal context.
Executive remuneration in the United Kingdom remains a subject of considerable public and political scrutiny, often characterized by contentious debates. Companies face a complex challenge: balancing the imperative to attract and retain world-class leadership talent in a competitive global market with persistent demands for fairness, enhanced transparency, and robust accountability from both shareholders and the wider public. The current environment is dynamic, marked by significant regulatory adjustments and a constant interplay between market forces, corporate strategic objectives, and societal expectations regarding equitable pay practices. This ongoing tension underscores the critical need for a nuanced understanding of how executive pay is structured, justified, and perceived in the UK.
The total compensation for Chief Executive Officers in the UK's largest companies continued its upward trajectory in 2024. The median total remuneration package for FTSE 100 CEOs for 2024 is estimated to have increased by 7%, rising from £4.49 million in 2023 to £4.79 million. This figure encompasses all components of pay, including base salary, bonuses, and long-term incentives. Earlier in 2024, specifically just before 1pm on Thursday 4 January, the High Pay Centre estimated that the median FTSE 100 CEO's earnings for the year would surpass the median UK worker's full-time annual salary. At that point, the median FTSE 100 CEO pay (excluding pension) stood at £3.81 million.
For the full year 2023, the median FTSE 100 CEO pay was £4.19 million, representing a 2.2% increase from £4.1 million in 2022, marking the highest median sum ever recorded. When considering the average pay for 2023, the figure was even higher at £4.98 million, reflecting a more substantial 12.2% increase from £4.44 million in 2022. The notable divergence between the median and average pay increases for FTSE 100 CEOs (e.g., 2.2% median versus 12.2% average in 2023) is a critical observation. This difference suggests that while executive pay is generally rising, a relatively small number of exceptionally high earners are disproportionately driving up the average figures. This pattern indicates a "winner-take-all" dynamic at the very apex of the corporate hierarchy, where a select few command significantly larger packages, rather than a uniform increase across all top executive roles. This concentration of high remuneration at the very top can intensify public and shareholder scrutiny, as it highlights extreme wealth accumulation by a few individuals within the corporate structure.
The disparity between CEO pay and that of the average worker remains a central point of contention and public debate in the UK. In early 2024, the median FTSE 100 CEO's pay of £3.81 million was 109 times the median full-time UK worker's annual salary of £34,963. This ratio highlights a significant and persistent gap. Looking ahead, estimates for 2025 suggest that median FTSE 100 CEO pay (excluding pension) will reach £4.22 million, 113 times the median full-time worker's pay of £37,430. While the median worker's pay increased by 7% in the past year, the median CEO pay increased by 2.5%, indicating a slight moderation in the growth of the pay gap in early 2025, but the absolute difference remains substantial.
For the full year 2023, the median FTSE 100 CEO pay of £4.19 million was 120 times the median earnings of a UK full-time worker (£34,963), a slight decrease from 124:1 in 2022. Across the broader FTSE 350 firms, the median CEO-to-worker pay ratio stood at 52:1, although for FTSE 100 companies within this group, the median ratio ballooned to 78:1. Outliers such as Mitie (575:1) and Tesco (431:1) further exemplify these extreme disparities.
These figures are not merely statistical observations; they carry significant societal implications. The widening chasm between executive and employee compensation has reached a critical point, leading to increased shareholder dissent and escalating governance risks. Companies with extreme pay gaps face reputational risks, potential consumer boycotts, and challenges in talent retention. For example, Tesco reportedly saw employee turnover rise to 120% in 2024 amid disputes over pay equity. Public sentiment strongly favors more equitable pay distribution, with a High Pay Centre survey revealing that 29% of the British public believe CEOs should earn no more than five times their average employee's salary, and only one hundredth of those surveyed finding a 100:1 ratio justifiable. This widespread perception of unfairness can erode trust within organizations and lead to disengaged employees, potentially undermining corporate culture and long-term performance.
While median and average figures provide a general overview, examining the highest individual payouts offers a clearer picture of the upper echelons of UK executive compensation. In 2023, the highest-paid FTSE 100 CEO was Pascal Soriot of AstraZeneca, who received £16.85 million. This figure was 482 times the pay of the median UK full-time worker. Erik Engstrom, CEO of analytics giant RELX, was next with £13.64 million, followed by Rolls-Royce CEO Tufan Erginbilgic with £13.61 million. In total, nine FTSE 100 CEOs were paid over £10 million in 2023, a significant increase from just four in 2022. This growing number of ultra-high earners contributes to the rising average pay and reinforces the perception of a widening gap at the top.
In the media sector, Erik Engstrom of RELX also took the top spot in 2024, receiving £13.5 million, although this represented a 10% decrease from the previous year. His Chief Financial Officer, Nick Luff, was second with £7 million. Stephen A Carter of Informa earned £4.2 million, while ITV boss Carolyn McCall was the best-paid broadcast executive, earning £4.1 million. These examples illustrate that while overall compensation is high, individual remuneration can fluctuate based on company performance and specific contractual arrangements.
A significant theme influencing UK executive pay is the ongoing debate about its competitiveness on the global stage, particularly in comparison to the United States. Leading figures, such as Julia Hoggett, chief executive of the London Stock Exchange, have argued that top executives at UK listed companies should be paid more to retain talent and prevent companies from relocating overseas. This perspective is driven by the stark difference in executive compensation between the UK and the US. For instance, in 2022, the average pay of S&P 500 CEOs was $25.2 million (£20.4 million), while the median pay of FTSE 100 CEOs was £3.9 million ($4.8 million).
Proponents of higher pay often cite the "optimal contracting" theory, which posits that larger, more complex companies require and should attract the best management talent, thus justifying higher pay packages. This theory also suggests that a CEO's strategic decisions have a multiplicative effect on firm value, meaning their impact scales with company size. While some analyses suggest that UK CEO pay is consistent with US pay when company size is factored in, the absolute disparity remains a concern for those advocating for increased competitiveness. The argument is that if UK companies offered more competitive remuneration, they might attract and retain more talented CEOs, potentially leading to greater growth and success akin to their US counterparts. This pressure to remain competitive is a primary driver behind the push for more flexible and potentially more generous incentive payments in the UK.
The regulatory and governance framework surrounding executive remuneration in the UK is undergoing continuous evolution, driven by a desire to balance corporate accountability with the need for flexibility in attracting top talent. Mercer's 2024 UK Board Remuneration Handbook indicates that executive pay is reverting to long-run norms after years of volatility, but also suggests precursors of significant future change.
Key developments include:
These regulatory adjustments reflect an ongoing effort to balance the need for corporate flexibility in a competitive global talent market with demands for greater transparency and accountability from shareholders and the public.
Executive pay in the UK continues to be a highly sensitive area, attracting significant scrutiny from shareholders and the wider public. Shareholder dissent over executive pay has been on the rise, with 9% of FTSE 350 companies facing shareholder revolts over executive pay in 2025, a 250% increase from 2024. This surge reflects frustration over pay packages that sometimes appear to outpace company performance, as exemplified by the backlash against Barclays CEO Juan Ramón Sanz's proposed £14.3 million payout in 2025 amidst stagnant retail banking profits.
The concept of pay equity and social impact is gaining increasing prominence. The High Pay Centre's Fair Reward Framework, launched in September 2024, aims to increase transparency around executive pay and make it easier for investors to access information about a company's social impact. This framework seeks to incentivize business practices that foster fairer societies, aligning with social scientists' arguments that growing income gaps are detrimental to society.
Shareholders are increasingly empowered to influence executive pay. The government's proposals to introduce binding votes on executive pay for UK-incorporated listed companies aim to encourage greater shareholder engagement in the design of remuneration policies. Under these proposals, shareholders would have a binding vote on the remuneration policy at the Annual General Meeting (AGM). If the policy is not approved, the company would either revert to the previous year's policy or hold another general meeting for approval of a revised policy. While shareholders would approve the framework, the ultimate details and shape of the policy would still be at the discretion of the company's remuneration committee. This increased power is expected to foster better engagement between companies and shareholders before policies are put forward.
Beyond formal votes, investors are increasingly prioritizing firms that proactively address pay equity. This includes avoiding high-ratio firms (e.g., those with CEO-to-worker ratios above 50:1), monitoring pay ratio disclosures, and engaging with activist funds that push for pay equity. The rejection of Marks & Spencer's £2.3 million CEO bonus in 2025 after a 22% shareholder rejection highlights the tangible influence of investor engagement. The message is clear: fair pay is viewed not just as a cost, but as a strategic asset, influencing reputational risk, talent attraction, and overall corporate stability.
Executive compensation packages in the UK are typically a combination of fixed and variable remuneration, designed to attract, retain, and incentivize top talent while aligning their interests with those of shareholders.
The primary components include:
In 2023, 81% of FTSE 100 companies paid their CEO an LTIP, with the mean payment increasing to £2,058,000. LTIPs are particularly important for public companies, which tend to diversify awards among at least two equity vehicles, unlike private companies that might rely more on cash-based LTIPs.
Deloitte's analysis suggests a typical executive compensation structure where salary constitutes approximately 30% of total compensation, bonuses 20%, benefits about 10%, and long-term incentives (equity) around 40%. This structure highlights the emphasis on variable, performance-linked pay, especially through equity, to align executive interests with long-term shareholder value creation. While cash bonuses offer guaranteed value, their motivational impact can be short-lived. Equity awards, conversely, improve a business's cash flow and foster a sense of ownership, but can lead to share dilution and introduce complexity in management and compliance.
A growing trend in executive compensation is the integration of Environmental, Social, and Governance (ESG) metrics into incentive plans. By 2022, over 90 of the FTSE 100 companies were incorporating ESG measures into their executive incentive plans. This move signals a prioritization of sustainability issues and an attempt to elevate them to the importance of traditional financial goals.
However, the practicalities of effectively linking ESG goals to executive pay are complex. A key challenge lies in the quality and measurability of sustainability data. A Deloitte report indicated that 45 of the UK's 100 largest publicly listed companies had to correct one or more of their ESG-related data points after publication in the past year, highlighting deficiencies in accurate measurement and reporting. This raises concerns about the effectiveness of ESG-linked incentives, as inaccurate data can render incentive systems ineffective or even counterproductive.
Furthermore, a study focusing on S&P 500 companies suggested that ESG-linked compensation systems often result in higher executive pay without necessarily leading to better sustainability outcomes. The study observed that executives missed financial targets far more frequently (22% of the time) than ESG targets (2% of the time), implying that ESG goals might be less ambitious, less transparent, and easier to manipulate compared to financial metrics, which are based on standardized accounting principles.
Despite these challenges, the movement to tie executive rewards to ESG performance continues to gather momentum. Experts suggest establishing clear, measurable ESG metrics, separating internal from external metrics, and ensuring these goals are "stretch goals" – achievable but challenging. The long-term incentive plan (LTIP) is often considered a more appropriate mechanism for rewarding environmental accomplishments, while other ESG achievements might be assessed on an annual basis. The goal is to reinforce executive accountability and ensure that the pursuit of financial success is inherently linked to positive social and environmental impact.
While the CEO typically commands the highest remuneration, pay structures vary significantly across other C-suite positions within UK companies. The compensation for other executive roles is generally substantially lower than that of a FTSE 100 CEO, reflecting differences in ultimate responsibility, market demand, and the scope of influence.
Based on available data for 2024, the average salaries for various C-suite positions in the broader UK market (not exclusively FTSE 100/350, which would likely show higher figures) are as follows:
It is crucial to note that these averages from one source appear to represent a broader market average, likely including smaller and private companies, which significantly lowers the figures compared to the multi-million-pound packages seen in FTSE 100 firms. For instance, while a median FTSE 100 CEO earns £4.79 million, the average for a general UK CEO is listed at £73,153. This stark contrast highlights the importance of company size and market segment when discussing executive remuneration.
For FTSE 350 executives (excluding CEOs), median pay was £1.32 million in early 2024, still significantly higher than the median UK worker's pay but considerably less than FTSE 100 CEO compensation. In the media sector, a Chief Financial Officer at RELX earned £7 million, while a Chief Operating Officer at Autotrader Group earned £1.389 million, illustrating that in some large companies, non-CEO C-suite roles can still command multi-million-pound packages, albeit generally less than the CEO.
Several factors contribute to the variation in C-suite compensation beyond the CEO role:
The overall structure of compensation for other C-suite members largely mirrors that of the CEO, comprising a combination of fixed salary, annual bonuses (short-term incentives), and long-term incentives (LTIPs), often equity-based. However, the relative proportions and absolute values differ.
The compensation structure for the broader C-suite is thus a nuanced package, designed to incentivize performance and retention while reflecting the specific role's contribution to the company's overall strategy and financial health.
The analysis of CEO and C-suite pay in UK companies in 2024 reveals a dynamic and often contentious landscape. Executive remuneration, particularly for FTSE 100 CEOs, continues its upward trend, reaching record median levels. This growth is set against a backdrop of significant pay disparities between top executives and the median UK worker, fueling public and shareholder scrutiny. The persistent "winner-take-all" phenomenon, where a few highly compensated individuals disproportionately drive up average pay figures, further intensifies this debate.
The strategic imperative to enhance UK executive pay competitiveness on the global stage, particularly against the United States, is a dominant driver of remuneration policy. This push for higher pay is intertwined with an evolving regulatory environment that seeks to introduce greater flexibility in compensation structures while simultaneously demanding enhanced transparency and accountability. The revised UK Corporate Governance Code and Investment Association Principles exemplify this dual focus, aiming to empower companies to attract top talent while ensuring robust oversight.
Shareholder activism and a growing emphasis on social impact are profoundly shaping remuneration practices. The increasing frequency of shareholder revolts over executive pay and the demand for clear CEO-to-worker pay ratios underscore the importance of aligning executive compensation with broader stakeholder interests and societal expectations. The integration of ESG metrics into incentive plans, while still facing challenges in measurability and ambition, represents a significant step towards linking executive performance to sustainable and responsible business practices.
The compensation for the broader C-suite, while substantial in large listed companies, typically falls significantly below that of the CEO. Variations across these roles are influenced by company size, industry sector, regional differences, and the specific responsibilities and market demand for each position. The structure of C-suite pay, like that of CEOs, heavily relies on variable, performance-linked components, particularly long-term incentives, to foster alignment with company objectives and ensure retention.
Looking ahead, the UK executive compensation landscape will likely continue to navigate the inherent tension between global talent market demands and domestic calls for pay equity and corporate responsibility. The effectiveness of new governance frameworks will be tested by how well they facilitate competitive remuneration while simultaneously promoting transparency, accountability, and a more equitable distribution of rewards across the workforce. Companies that proactively address these complexities, fostering open dialogue with shareholders and employees, and clearly articulating the rationale behind their remuneration decisions, will be better positioned to attract and retain the leadership talent necessary for sustained success in a highly scrutinized environment.