FTSE 100 director earnings hit by $133m since Brexit as weaker pound bites

July 7, 2017

  • Loss in value makes it easier for overseas competitors to pick-up UK-based talent

FTSE 100 directors have lost US $133m (£103m) in value from their total remuneration over the last year as the post-Brexit fall in sterling hit the competitiveness of their pay packets versus their comparators at overseas companies, says DHR International, the global executive search firm.

DHR International says total FTSE 100 total boardroom pay, including the value of share option grants and LTIPs, was $1.14bn* in June 2016 and $1bn in May 2017.

DHR International says that whilst some UK listed companies will structure their pay in dollars or in euros (insulating their executives from the fall in sterling) the typical UK domiciled company will struggle to make good the loss in value from currency changes. This could result in some UK-based directors being more open to moving overseas or to working for companies that pay in dollars or euros.

DHR International says board remuneration at Prudential has been devalued by $6.5m since June 2016. Other FTSE 100 companies which saw large devaluations over the same period include, Persimmon ($3m), Schroders ($2.9m) and Compass Group ($2.9m). 

Frank Smeekes, Managing Partner, Europe, at DHR International, says: “FTSE 100 executives are starting to sit up and take notice as the weak pound drags down the value of their pay packages versus their peers at US, Swiss and German companies.”

“The average devaluation of board remuneration at FTSE 100 companies since Brexit is north of $1.6m. That loss in value is hard to ignore.”

“In recent months, we have noticed that some executives are now more open to having a conversation with foreign companies, who are looking to utilise their increased buying power.”

“During bonus season, we saw several major US banks pay their British staff higher bonuses in sterling without incurring any extra costs on their balance sheet. As a result, US banks look like the better-paying employers which helps them with their recruitment.”

*Remuneration of board members for 2016 obtained from company filings. Covers those paid in sterling as opposed to pay disclosed in US$ or Euros. Difference in dollar value calculated using historic exchange rates. 

 

Total FTSE 100 director remuneration has been devalued by $133m since Brexit – total remuneration in $bn

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