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Last Monday's stock market fall cost the average FTSE 100 executive director £250,000 ($639,000), says an analysis.
The analysis, by remuneration consultants at HSBC, revealed that about half of directors' salaries are in equity-related, long-term incentive plans or bonuses.
But most of these schemes require that any awards are rolled up for three years, which, together with the requirement that directors have shareholdings in their companies worth around twice their salary, means that as much as two and a half times their salaries can be exposed to fluctuations in the stock market.
Based on average total remuneration of £2.5 million, that puts the cost of last Monday's fall in shares at £250,000.
The targets for these incentive schemes are the total shareholder return (TSR) of the company, calculated by adding the rise in the share price to dividends paid.
Stock market falls mean TSR will also decline, says Sean O'Hare of PricewaterhouseCoopers.
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