The UK media are currently full of articles featuring IDS’ (Income Data Services) Directors’ Pay Report 2013, which suggests that FTSE 100 director pay has increased by 14% over the last year. If, however, you read behind the headlines, you see a very different picture.

The increase is predominantly caused by the pay-outs from long-term incentive plans (LTIPs), which will have been granted three or more years ago. In fact, one of the reasons for the high levels of LTIP pay-outs is likely to be the significant increase in the values of publicly traded shares in recent years, a feature that remuneration committees would have struggled to predict in 2009. The more recent decisions made by remuneration committees show a more modest 4% increase in median salary and an 8.8% fall in bonus pay-outs.

Steve Tatton from IDS confirmed to the BBC that the evidence is that more recent LTIP awards have been smaller in size. Dr Vince Cable (Secretary of State for Business, Innovation & Skills), speaking at an event hosted by The Work Foundation in London, also confirmed his view that the 14% figure was not reflective of the way that remuneration committees have recently been approaching the hot topic of executive pay.