Salary increases for UK's FTSE 350 executive directors have slowed compared to last year, according to a new report by business advisory firm Deloitte. The median increase is now 6.2 per cent compared with 7.0 per cent 12 months ago. However, companies are increasingly willing to pay for the business superstars in order to safeguard a strong management team.

Carol Arrowsmith, partner and head of the remuneration team at Deloitte, said: “Executive salary increases during 2007 were still around 2 per cent higher than increases in RPI [retail price index] and average earnings but we are starting to see the impact of a tougher economic climate on salary increases.”

Deloitte’s analysis also shows that the gap between the potential remuneration of the chief executive and the rest of the board is increasing. The chief executive in one in three FTSE 100 companies and one in five FTSE 250 companies now has a higher annual and long term incentive opportunity than other board members.

Ms Arrowsmith said: “A number of companies have introduced one-off bespoke remuneration arrangements, designed to achieve specific business objectives or in some cases aimed at retaining highly sought after individuals.”

Deloitte has also found that remuneration in the very largest UK companies is moving away from the rest of the FTSE 100 companies. The typical salary of a chief executive of a top 30 company is well over £1 million (about $1.8 million), compared with a typical salary of £750,000 in a FTSE 100 company outside the top 30. Executive directors in the top 30 companies also have potential incentives worth a further 4 times salary compared with an incentive potential of 2.75 times salary in other FTSE 100 companies.