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FTSE 100 NED fees rise slows to 3%, its lowest for 15 years

UK FTSE 100 NEDs have seen their fat fee increases decline to 3% last year – down from 2014’s bumper 7% hike.

The downward trend was revealed in PwC’s latest annual NED report. The 2015 rise was the lowest median fee increase since the survey began in 1999.

In 2015, two thirds of FTSE 100 companies conducted a fee review and of these, around half made changes to base fees. Runaway fees are now being stabilised as companies try to keep pay increases for executives and non-executives more in line with the wider workforce.

Fiona Camenzuli, partner in PwC’s reward & employment team, said: “The 2015 data suggests that there has been a conscious decision to align practice for NED fee increases with that of the executive team and the rest of the workforce, through more gradual fee increases.

“The environment has changed and boards are mindful of the broader debate on fair pay and the likely impact on their reputation and brand. Although it remains to be seen if this trend continues when companies review fees in 2016.”

Camenzuli estimates that a NED’s working days have now increased from around 20 days to some 30 days per year. But, she adds, NEDs take on the role for a number of reasons, pay typically being fairly low down the list.”

The number of female FTSE100 NEDs rose by 29%, almost double 2010’s figure. But female board directors make up just 11% of roles and there are only five female CEOs in the FTSE 100.

The median base fee level for FTSE 100 chairmen was £393,000 in 2015, up 5% from £373,000 2014, For FTSE 100 NEDs the median base fee level stayed consistent with 2014 at £65,000.

 

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