Directors' pay rose by 49% - what are your views on performance-related pay?

Research carried out by the Incomes Data Services (IDS) reveals that FTSE 100 directors have seen their total earnings increase by an average of 49% in the last financial year, and are now averaging £2,697,664 per annum.

IDS say that this increase was even higher than the 43% rise in total earnings for CEOs, which suggests that executive largesse is evenly spread across the board.

FTSE 100 directors also saw their average bonus payments increase by 23%, from £737,624 in 2010 to £906,044 in 2011.

Steve Tatton, editor of the IDS report, said: “The generous remuneration packages that FTSE 100 directors now  receive indicates a marked improvement in boardroom fortunes.”

“But with closer scrutiny of boardroom pay expected in the future, remuneration  committees will have to make sure that they are able to provide full and thorough  justifications for the bonuses awarded.”

“This means that they will have to be much more transparent about how total benefits packages are structured and how performance is measured.”

Total earnings of FTSE 100 directors rose across the board, with the breakdown as follows:

• CEOs received an average increase of 43.5% (£3,855,172)
• Finance directors received an average increase of 34.1% (£2,001,515)
• All other directors received an average increase of 66.5% (£2,260,033)

What are your views on performance-related pay? What are the incentives that work?