The average chief executive of a listed retailer earns£1 for every£305 of profit delivered, compared with£1 for every£858 across business sectors, according to the study by executive search firm Durler Consulting. The average retail chief executive earns£1.5 million a year.
The high remuneration reflects the growing pressures of the role, shown by the appointments of potential miracle workers such as Steve Johnson at Woolworths and John Browett at DSGi.
However, chief executives’ tenure is increasingly focused on immediate rather than long-term strategy.
Durler Consulting managing director Julian Dawson said: “Retail boards are agreeing pay deals for new chief executives that are factoring in an assumption that their appointee will not be in post for long.
“With mounting economic pressures, our industry sources are describing a virtueless circle in which chief executives, under intense pressure to deliver, are involving themselves in tactical trading decisions at the cost of medium- to long-term strategy.”
He said that a gulf is being created “where strategic leadership ought to reside” and “the net effect is an increased risk of a spiral of underperformance”.
The average tenure of retail chief executives has fallen from five years in 2003 to 4.5 years now. Dawson said that was “arguably below the term needed to plan and deliver a medium-term turnaround strategy”.