Anger as top executives get 12pc increase in payouts

The remuneration for chief executives in 2011 far outweighed the one per cent average rise for their employees and came despite a five per cent fall in the FTSE 100 Index, according to a report by proxy voting agency Manifest and remuneration consultancy MM&K.

A quarter of bosses enjoyed a hike of more than 41 per cent, with Barclays boss Bob Diamond the top earner after securing total realisable remuneration of nearly £21m.

The findings will fan the flames over executive pay following the so-called Shareholder Spring, which has already seen numerous rebellions over remuneration plans.

Business Secretary Vince Cable is currently drawing up plans to give greater power to shareholders but is understood to be considering watering down proposals for a binding annual vote in favour of a poll every three years.

The report revealed that basic salaries of FTSE 100 chiefs rose 2.5 per cent but total earnings were boosted by deferred bonuses and long-term awards.

The £4.8m average total remuneration is roughly 200 times the typical £24,000 private sector wage.

The median increase in take-home pay for chief executives was 10 per cent to £3.7m.

Shareholder pressure has already claimed several scalps so far this year, including Aviva’s Andrew Moss and AstraZeneca’s David Brennan.

However, the growth of top bosses’ pay will add weight to calls for more to be done to empower shareholders, whose votes are currently only advisory and can be ignored by companies.

Manifest chief executive Sarah Wilson said: “Remuneration committees need more support from shareholders in order to control management’s requests for greater and greater rewards.”

Cliff Weight, a director at MM&K, said directors’ remuneration at the very largest companies is only a small percentage of profits and there is little to stop more increases.

The survey comes the day after it emerged that the boss of Thames Water was awarded a bonus nearly equal to his annual salary after a year in which a hosepipe ban was announced and customer satisfaction “deteriorated”.

Chief executive Martin Baggs was awarded an annual bonus of £418,359 for the year to March 31 on top of his £425,000 salary, according to the company’s annual report.

Paul Kenny, general secretary of the GMB union, said: “There is no limit to the greed of the elite who run business and the City.

“The only mechanism that will curtail their take home pay is the tax system.

“The Chancellor needs to reverse his decision to cut top rate tax from 50 per cent to 45 per cent.”