UK bosses close pay gap on Americans

PAY packages in British boardrooms are closing in on American super-salaries as two top companies prepare to issue multi-million pound share packages to incentivise key staff.

The average British chief executive's total annual pay soared 80% from £955,000 to £1.7m between 1997 and 2003. At the same time the income of American bosses - traditionally far higher - has stayed relatively flat at £2.8m.

The research, carried out by Aston Business School, shows that UK companies have begun emulating US firms by introducing hefty share options and long-term incentive plans.

One such scheme, for the head of Royal Bank of Scotland's US operations, may be the first to draw criticism from shareholder groups when the annual meeting season kicks off next month.

RBS is proposing a new long-term incentive plan for Larry Fish on top of an annual package that could scoop him £7m in cash and options. Citizens, the New England retail bank he runs for RBS, has doubled in size after an acquisition drive.

RBS is 'unaware of any approaches to date' from shareholders unhappy with the scheme. Several have been consulted on the new incentive plan ahead of a vote at the bank's AGM on 20 April.

However, the National Association of Pension Funds is seeking further details of the award before offering advice to members.

Meanwhile, Sainsbury's new finance director Darren Shapland may pocket almost £6m over four years, including a maximum £2.6m payout from a share incentive plan.

That figure is part of a £100m bonus pot being dangled in front of 1,100 managers in an effort to turn the supermarket around.

Details of the award will be revealed on Thursday when Sainsbury issues fourth-quarter sales figures. Shapland must put £200,000 of his own cash into the scheme.