Average bonuses for directors of FTSE 350 companies soared by 187% since 2002, despite companies' share prices failing to follow suit, a new report has revealed.
The High Pay Commission said in a study released today executives have seen payouts rocket, without a corresponding move in year-end share prices which have declined by 71% over the period.
FTSE 100 companies were among the most generous at dishing out rewards, with bosses paid on average nearly £4.5m each last year alone after a sharp jump in profits paid out on share options, and an increase in long-term incentive plans.
The figure is nearly double 2009's average payout of £2.9m, and well in advance of the move in the share prices of leading companies.
Commission chairman Deborah Hargreaves said it is a "myth" big bonuses mean companies performed better.
She said: "The evidence exposes the myth that big bonuses and high salaries result in better company performances.
"There has been massive growth in what has been termed as performance-related pay yet no such corresponding leap forward in company performance."
She added changes to remuneration schemes are masking the real value of what executives get paid.
"Corporate governance reforms attempting to link pay with performance appear to have done little more than add to the huge complexity of executive packages, reward schemes and bonuses that make up the pay of FTSE 100 directors," Hargreaves said.
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