With the growing inequality between organisations’ top brass and their general workforce under intense scrutiny, consulting and advisory firm Deloitte has found that increases to CEOs’ guaranteed pay over the last five increase periods exceeded inflation by a considerable margin, with significant yearly cash bonuses – in relation to guaranteed pay – also paid to CEOs and CFOs over the last six years, according to the firm’s ‘Executive Compensation Report’.

“Our analysis uncovered some key trends that, in our view, definitely [add] vitriol to the debate, and are not well addressed in the disclosure within remuneration reports, which provide little or no explanation as to the cause or reason for these trends,” notes Deloitte actuarial, rewards and analytics leader Leslie Yuill, pointing out that guaranteed pay levels for CEOs are one of those trends.

Apart from consistently outstripping inflation, the Deloitte study, a detailed benchmark analysis of six years of top executive pay in relation to company performance, has found little apparent correlation between CEOs’ guaranteed pay and the size and complexity of the organisation they are charged to lead.

In the case of CEOs, the Deloitte analysis identified just 15% of instances where an incentive was not paid over the last six years. In the case of CFOs, instances in which bonuses were not paid were even rarer, at 9%.

Another issue explored in the Deloitte study is the alignment between executive pay, shareholder value and company performance.

“Through the last six years, executive pay growth is broadly in line with growth in shareholder value creation, but generally outstripped growth in turnover and headline earnings,” says the report.

However, the mining, resources and construction (MRC) sector appears to be the exception to the apparent logic.

“Whereas the other sectors have doubled or trebled shareholder value, the MRC sector has destroyed value, to the extent of approximately a third. Despite this, the impact on MRC executive pay has not been dramatic, and shareholder and company misfortune has not correlated with executive pay.”