06 March 2001
Company executives retire gratefully
Retiring company executives are increasingly looking forward to six-figure annual pension entitlements, according to Labour Research magazine.
Its annual survey of directors with the highest pension entitlement in each FTSE 100 company reveals that 41 are set to retire on ?250,000 or more a year, including seven who will get at least ?500,000.
These figures mark an escalation of the soaring executive pension story. A similar survey conducted by Labour Research last year found 39 directors set to get ?250,000 plus and only two directors topping the half-million mark.
The figures only represent the pension they have already built up. They are actually likely to end up with more as entitlement is based on length of service and salary at retirement.
Topping the table are two US-based directors - Dr Jean-Pierre Garnier at drugs group SmithKline Beecham (now part of GlaxoSmithKline) and Robert Phillips at the food and consumer products group Unilever.
Garnier, age 52, can already count on ?700,000 a year when he retires. He will also be credited with an additional three years' service when he retires from the company. Phillips, aged 61, has so far built up a pension of ?556,723 a year.
Employees lucky enough to be in occupational pension schemes, however, do not do quite so well - and not just because their final salary will be much lower.
The average final salary scheme sees the employee's pension accruing at 1/60th of pay for each year of service, so a 40-year career would produce a pension worth two-thirds of earnings. For directors a 1/30th accrual rate is very common.
Notes to editors
1 More details of the survey, including a list of directors with the highest pension entitlement in each FTSE 100 company, are published in the enclosed March 2001 edition of Labour Research.
2 Labour Research is published by the Labour Research Department, an independent trade union and labour movement organisation founded 89 years ago. More than 1,800 trade union organisations, including 55 national unions representing 99% of total TUC membership, are affiliated.
3 For further information contact Richard Pond on 020 7902 9812.