RREV (Research Recommendations and Electronic Voting), ISS' UK corporate governance team, which applies the National Association of Pension Funds Corporate Governance Policy, has published a new report 'Trends in Executive Remuneration in 2006.' Key findings include that median salary increases for UK CEOs ranged from 8% (FTSE 100 and SmallCap) to 14% (FTSE 250). At CEO level, the largest percentage growth was at the lower quartile level, which was particularly marked at FTSE 100 companies, with an increase of 18%.

Performance related bonus payments received by UK executive directors increased by higher percentages than salaries. At CEO level, median bonus payments at FTSE SmallCap companies increased by 31%, at FTSE 250 companies by 34% and at FTSE 100 companies by 39%. In 2006 many companies have raised the maximum annual bonus potential. The data shows that bonus payments have increased as a percentage of (increased) salary across the board.

The use of performance share plans continues to account for the clear majority of new schemes in the UK. The number of new option plans and co-investment/matching plans proposed continued to decline, while the number of performance share plans remained approximately the same as in 2005.

To hear David Patterson, Director of Research, RREV and Head of Corporate Governance, National Association of Pension Funds (UK), discuss the 2006 Remuneration Report, please visit here.