BAE boss enjoys pay boost after long-term incentive plan kicks in

The chief executive of BAE Systems saw his pay package swell to more than £10.6mn last year after a long-term incentive plan paid out, putting him among the top earners in London’s blue-chip FTSE 100 index.

Charles Woodburn, who has led Europe’s biggest defence company since July 2017, received more than £6.8mn as part of a three-year incentive scheme awarded in 2020, according to the company’s annual report published on Wednesday. The scheme was based in equal measure on total shareholder return and earnings per share.

Woodburn also received an annual bonus worth £2.5mn after hitting a series of financial and strategic performance targets. He was paid a base salary of £1.1mn, an increase of 2.5 per cent over the previous year.

According to data compiled by the High Pay Centre think-tank last year using pay awards for 2021, the £10.69mn would put Woodburn among the top 10 FTSE 100 chief executives.

BAE was the best-performing FTSE 100 stock in 2022 as investors piled into global defence companies following the war in Ukraine, betting on government promises of higher military spending. Its shares rose more than 50 per cent in 2022. They closed at 986p on Wednesday, an all-time high.

The company, which builds everything from Eurofighter Typhoon jets to nuclear submarines and combat vehicles as well as making ammunition for the British military, has also enjoyed an improved underlying financial performance.

BAE said in February that it had taken in a record £37bn in new orders, propelling its order backlog to £58.9bn. The strong order haul, which mostly predated the war in Ukraine, included a contract to build an additional five Type 26 frigates for the Royal Navy as well as a contract with Slovakia for its CV90 combat vehicle.

BAE also gave an upbeat assessment for this year, telling investors at the time that it expects sales to increase by between 3 per cent to 5 per cent, with higher growth in particular in its electronic systems business, which provides secure communication systems and other technologies to a range of government customers. Underlying earnings before interest and taxes are expected to improve by 4 per cent to 6 per cent.