Drinks firm boss highlighted in critical high pay report

03-Aug-2017 - Last updated on 04-Aug-2017 at 09:34 GMT

High earner: The chief executive of Whitbread, Alison Brittain, was paid just under £1.5 million in 2016

The chief executive of Whitbread, Alison Brittain, was paid just under £1.5 million in 2016, the fifth highest paid woman boss of a FTSE 100 company mentioned in a report on executive pay.

Her earnings of £1,490,000 were almost exactly £1m less than the average for the four other women chief executives named in the report.

In contrast, the highest paid male chief executive was Sir Martin Sorrell, of advertising company WPP, who earned more than £48m in 2016.

Brittain is the only chief executive of a drinks-related company named in the report on FTSE 100 executive pay packages, which was prepared by CIPD, the professional body for HR and people development, and independent think tank the High Pay Centre.

The report went on to highlight that for every £1 the average employee is paid, their chief executive receives £129. This is lower than last year’s figure of £148, but is high when compared with the £45 they would have received 20 years ago.

Gender pay gap

Figures in the report revealed a clear gender pay gap. The consumer services sector, of which hospitality companies are a part, has a higher pay gap ratio than any other sector analysed, the report says. It showed that bosses in hospitality receive 248 times more pay than the average employee. The lowest ratio was found among technology companies at just 24 times.

Whitbread’s pay ratio is 183, higher than 13 companies mentioned including Intercontinental Hotels, ITV, Kingfisher, Sky, Marks & Spencer, and Morrisons but lower than Sainsbury’s, Tesco, Next, Compass Group, Carnival and WPP.

When it comes to consumer goods, rather than services, two drinks-related companies are mentioned - Diageo, the world’s largest producer of spirits and a key producer of beer, and Coca Cola HBC AG, a leading bottler of Coca Cola brands.

The report said that Diageo’s chief executive to staff package pay ratio is 98 times greater, while Coca Cola HBC AG’s is 108. However, both are below the overall ratio, with five being much higher.

The overall pay packages of chief executives are largely made up of variable pay. Only 20 per cent of total pay is represented by base salary. The remainder comes from long-term incentive plans, short-term bonuses, pensions and other benefits such as car allowance, health insurance, life insurance, tax advice, relocation expenses, housing and education allowances, tax equalisation, exchange rate adjustments and gym membership.

The report said: “We have seen a significant rise in the number of FTSE 100 companies reporting Brexit as a risk, with 71 companies mentioning it compared with just three last year. A further two firms have reported on the business opportunities for Brexit.”

The report makes a number of recommendations, encouraging companies to disclose more information.